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
Which businesses are allowed to reopen right now? And which businesses are actually doing so?
As a patchwork of states start to reopen, businesses that fall into a gray area are wondering when they can reopen. In many places, salons are still shuttered. Bars are mostly closed, too, although restaurants may be allowed to ramp up, depending on the state. “It’s kind of all over the place,” said Elizabeth Milito of the National Federation of Independent Business.
Will you be able to go on vacation this summer?
There’s no chance that this summer will be a normal season for vacations either in the U.S. or internationally. But that doesn’t mean a trip will be impossible. People will just have to be smart about it. That could mean vacations closer to home, especially with gas prices so low. Air travel will be possible this summer, even if it is a very different experience than usual.
When does the expanded COVID-19 unemployment insurance run out?
The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.
You can find answers to more questions here.
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