From brick and mortar retailers to fossil fuel industry heavyweights some American businesses have been having a hard time of late. As competition from online businesses grows, more than 7,000 stores shut in 2019 in the US, while changing consumer behavior is not only affecting the retail sector, but the energy industry, pharmaceutical business and others, meaning that many big companies have had to restructure to pay off debts, or in some instances close completely. Click through to find out the companies who went bankrupt in 2019.
The online retailer of plus-size clothing announced its bankruptcy on 3 January, looking to cut $900 million of its $1 billion debt. Bloomberg reported it was the fastest bankruptcy in history, with approval for its restructure plan granted in less than 24 hours. However, Fullbeauty Brands Inc. announced on 7 January it secured $35 million in new financing and successfully reduced its debt, with Goldman Sachs and Oaktree Capital Management now the majority shareholders.
Facing debts of more than $30 billion because of its role in starting the California wildfires in 2017 and 2018, the state’s largest utility company Pacific Gas & Electric (PG&E) declared bankruptcy in January. As of September the company had agreed on a settlement of $11 billion with insurance companies who had made payments to businesses and individuals who had suffered damages from the wildfires. A further $1 billion was agreed to go to local governments and public groups that were almost impacted.
The company behind retailers Sleep Outfitters, Mattress Warehouse, and Mattress King filed bankruptcy in January saying it was looking for a buyer and would close some of its 142 stores. Tempur Sealy chairman and CEO Scott Thompson said the firm’s “overextended retail footprint and thin capital structure” could not compete in the “recent retail environment.” His company would go on to purchase IMS in April, but will not rebrand the stores as Tempur Sealy.
The Wisconsin-based chain grew across the Midwest and even as far south as Texas and west to Oregon, but struggled to compete with Walmart and Target. With as much as $10 billion in debt, and only $1 billion in assets it filed bankruptcy on 16 January. While all of Shopko’s stores are closed, investment firm Monarch Alternative Capital purchased the company’s optical business. The firm is in the process of reopening Shopko Optical to nearby standalone shops.
This is the second bankruptcy for the children’s clothing retailer, which also owns Crazy 8 and Janie and Jack. Following the 16 January filing, the company announced it would close more than 800 stores in the US. Rival Children’s Place purchased the Gymboree brand, including Crazy 8, in March for $76 million. It is planning a relaunch in spring 2020 with Gymboree-branded clothing for sale in Children’s Place stores. At the same time Gap purchased Janie and Jack for $35 million.
More than $120 million in debt the mall store known for engraved gifts filed for bankruptcy on 6 February. Roughly a month later the company announced that Enesco, a giftware and home décor company, acquired the business, and 176 of its stores will continue to operate under the Things Remembered name. In the process 1,400 jobs have been saved.
Filing for chapter 11 protection on 18 February marked the second time Payless has faced bankruptcy. The first time, in 2017, left the brand in debt and “ill-equipped to survive in today’s retail environment,” it said. Now with $470 million in outstanding debt all 2,500 Payless Shoes stores in the US, as well as its Puerto Rican and Canadian shops have closed. Those in Latin America, however, will stay open.
Having lost money for six years in a row, New York-based Diesel USA Inc filed for bankruptcy protection from creditors in March 2019. Annual sales plunged 53% and theft and cyber fraud cost the company $1.2 million over three years. Also a $90 million investment, mostly in its US stores, was ill-timed and did not pay out as expected. In March 2019, the company filed for Chapter 11 bankruptcy in Delaware. But the brand doesn't plan to disappear in the US. The bankruptcy filing had a three-year plan attached, that includes refitting old stores to make them cheaper to operate, and even opening new stores.
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Just One More Restaurant (JOMR), the corporation that licenses the iconic steakhouse’s name, filed for a voluntary bankruptcy in March, largely due to a family feud. The original restaurant opened in New York in the 1920s and expanded throughout the US. Minority shareholders say that when JOMR issued licenses to use The Palm name and logo, the majority shareholders didn’t charge enough. A judge ruled in their favor calling for $120 million in lost royalties.
The home decor store filed bankruptcy in March, closing 17 of its locations. Z Gallerie said it over-expanded and invested too little in its online sales, according to documents filed on 22 March. Not only that but a new distribution center in Atlanta proved costly at a time when fewer new houses were being built and wider industry trends have seen a drop in brick and mortar stores, the company claimed. It's not the first chapter 11 bankruptcy for the company: in 2009 the company bounced back with a $22 million boost from Wells Fargo Business Credit.
The company comprising two divisions, a custom golf club business and a portfolio of golf courses, announced its chapter 11 filings in early March, saying it had enough funding to stay in business as it reorganized. Warrior highlighted a decline in the sport as one reason it is struggling, according to Reuters, which quoted bankruptcy documents also pointing a finger at “lack of management depth and professional support”.
Better known for Ebony and Jet magazines, which were sold in 2016, the company owned millions of photos and videos from its publishing days. It filed bankruptcy in April and held in auction in July to sell off its archives and pay creditors. Four foundations, the J. Paul Getty Trust, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, and the Andrew W. Mellon Foundation, made the winning bid of around $30 million. The archive was appraised at $46 million in 2015, according to consultant Hilco Streambank.
With revenues down and several locations closing over the last year, the sushi restaurant filed for bankruptcy in late April and struggled to find a buyer over the summer. This all followed a January lawsuit from former CEO James Kuhn suing for lost wages. ONE Group Hospitality agreed to buy Kona Grill and its 24 remaining locations for $25 million in October.
With its sales down the parent company of sporting goods stores Ellett Brothers and Jerry’s Sports Center filed bankruptcy in June. In documents published by CBS the company says it stocked up on guns in the run-up to the 2016 presidential election, expecting an uptick in sales “historically attributable to the election of a Democratic presidential nominee”. The unsold guns are part of several of the reasons it cited for the bankruptcy.
Its July bankruptcy filling is the second in two years, having filed Chapter 11 in late 2017 and closing more than 100 stores. Now, in 2019, all 261 remaining Charming Charlie stores across 38 states will close. However, founder Charles Chanaratsopon made the highest bid on the comany's intellectual property, such as the IP address, this fall. Bidding started at $200,000 and Chanaratsopon's real estate investment company CJS Group LP had the winning bid at $1.125 billion.
Just two days before filing bankruptcy in August, the plus-size clothing retailer announced it would be closing all 222 stores. Dating back to 1983, it had locations in more than 30 states. However retail analysts point out plus size brands, especially brick and mortar stores, are seeing new competition from larger retailers like Target who are expanding their size ranges.
In August A'GACI announced that it was filing bankruptcy and that all its 54 stores were to close. A’GACI had $21 million of merchandise to sell in its closing down sales, according to SB360 Capital Partners. It raised another $225,000 through an auction for its intellectual property, such as trademarks and the domain name. The sale closed in October according to consultant Hilco Streambank who oversaw the auction.
Luxury department store Barneys New York has been around for almost a century and survived some difficult times in the past. But its luck ran out this August when it filled for bankruptcy in August, which many news outlets declared to be the end of an era. Authentic Brands Group, which owns companies such as Nine West, purchased the Barneys name and will license it to Saks Fifth Avenue, and B. Riley Financial bought the remaining assets in November. In total the two transactions are worth $271 million. B. Riley says high-end and luxury goods are now being sold at unprecedented discounts, starting with private sales.
After reporting losses every year since 2015 discount retail chain and pharmacy Fred's started closing stores earlier this year before declaring bankruptcy in September. CNN reported it was seeking a $35 million loan to close down its business. SB360 Capital Partners is overseeing the closing down sales at its remaining 81 stores. Fred’s pharmacies are still open while the company looks for a buyer for that side of the business.
Owned by the Sackler family, the maker of OxyContin filed for bankruptcy in September as part of its billion-dollar settlement plan for the legal action brought against it by more than 2,000 plaintiffs. Many states and local governments accused the company of fueling the opioid crisis, and it had hoped the bankruptcy would settle all matters. Several states, including New York and Massachusetts, are contesting the deal saying the company needs to pay more.
In September 2019, Forever 21 filed for bankruptcy, announcing that it would close most of its stores in Europe and Asia and some in the US. The Chang family, which owns the company, told the New York Times declines in both mall traffic and demand for fast fashion are among the reasons the brand has struggled. The brand's image has also suffered from the $10 million lawsuit that singer Ariana Grande has brought against Forever 21 after it used her trademark style to promote its products on Instagram. The company now wants to “focus on the profitable core part” of its operations and is undergoing restructuring.
This Houston-based oil company announced its voluntary bankruptcy on 3 October, saying it will operate as normal through the process and has enough money to support its operations. The Wall Street Journal called it the largest bankruptcy in the oil and gas industry with more than $4 billion of debt. Law firm Haynes and Boone published a report on oil and gas bankruptcies since 2015 finding more than nearly 200 producers have filed bankruptcy in that time, with 33 this year alone (as of September 30).
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Publishing a variety of state-by-state bridal, business and other magazines, this Minnesota-based firm that employed 86 people filed for bankruptcy in October. Local media reported that the publisher owed between $1 to 10 million to more than 200 different creditors, yet only had assets of less than $50,000.
As well as its brands A Pea in a Pod and Motherhood Maternity, the company declared bankruptcy on 21 October, filing chapter 11. It will close 183 of its more than 400 stores, but otherwise plans to continue operating. The company said “in a challenging retail environment, we have had to make some very tough choices,” and has also claimed a declining birth rate has affected its business.
The country’s largest privately-owned coal company filed for bankruptcy in October. The chapter 11 process has led to a $350 million loan for it to refinance its debts and continue paying employees, among other expenses. Robert Murray, president and CEO, has stepped down but will remain the company's chairman. He had previously lobbied the Trump administration to improve the market for coal, but despite his efforts coal production is on the decline for 2019 according to the US Energy Information Agency.