J.C. Penney joins ranks of major retailers filing for bankruptcy
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Hardly anyone is out shopping because of the COVID-19 pandemic, and no one knows when business will go back to normal. On Friday, J.C. Penney became just the latest in a line of major retailers to declare bankruptcy.
Neiman Marcus and J. Crew have also declared bankruptcy. The pandemic has dealt a major blow to retail, but even when the economy was booming, these businesses struggled.
They had crushing debt, and too many brick-and-mortar stores at a time when people shop online. Experts say the lesson is if you can’t do well during good times, you’ll fall quickly during the bad ones.
“The pandemic didn’t put these companies out of business,” said Erik Gordon at the University of Michigan’s Ross School of Business. “These companies, they were going down the drain before the pandemic. So, you have to stay up to date. These are retailers that fell behind the times and are having trouble catching up.”
Gordon says we can expect more closures and bankruptcy filings. All eyes are on other industry giants, like Nordstrom, which has already permanently shuttered over a dozen locations.
That’s bad news for retail workers, tens of thousand of which have already been furloughed. More layoffs are expected.
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