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.
COVID-19 Economy FAQs
What are the details of President Joe Biden’s coronavirus relief plan?
The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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