While the year 2020 was a great year for online businesses and many startups, retail businesses fully relying on brick and mortar stores had suffered due to COVID-19. For some, the year 2020 was the last year of operation, as they went bankrupt thanks to the pandemic.
In this article, we discuss what happened with 6 major retail businesses that couldn't adapt to the new business environment caused by COVID-19.
Guitar Center was founded in 1959 as The Organ Center. It ended its operations in November 2020. Being the United States' biggest retailer of music instruments and valued at over 1 billion dollars, many people were not pleased by the news. While the business went bankrupt, a restructuring plan was proposed that hopefully will see new investments being made to restart the business in one form or another.
Neiman Markus is a huge retailer that was valued at over 5 billion dollars, and also an old one as it was founded in 1907. The high-end department store went bankrupt in September 2020, removing 4 billion dollars of debt. The business is now owned by three investment companies which are expected to create a new restructuring plan and move the huge business towards profitability. The new owners of Neiman Markus are PIMCO, Sixth Street and Davidson Kempner Capital Management.
Stein Mart is a very old retail business that was founded back in 1907. It owned 280 stores before going bankrupt in August 2020, just a few months after the start of the pandemic. The intellectual property of the business valued at over 500 million dollars was sold to Retail E-commerce Ventures, a Miami based business, for 6.02 million dollars.
Brooks Brothers was founded back in 1818, before finally having its journey nearly ended in July 2020 as it went bankrupt. The company was bought by Simon Property Group and Authentic Brands Group for 325 million dollars, forming a new joint venture. The newly established joint venture is called Sparc Group. It promised to keep 124 Brooks Brothers stores open, compared to 244 operating stores at the time of bankruptcy.
GNC was founded in 1935 and its journey ended in June 2020. The company sold vitamins and supplements and had around a whopping 1300 stores in the United States and Canada, with a valuation of around 1 billion dollars. The business ended up being sold to the Chinese business Harbin Pharmaceutical Group for 770 million dollars in September 2020.
Ascena Retail was founded in 1962 with the name Dressbarn. In July 2020, the giant business valued at nearly a billion dollars couldn't keep operating and went bankrupt. A number of sub brands like Ann Taylor, Loft, Lane Bryant, and Lou & Grey were sold to Sycamore Partners. Sycamore Partners is a private equity firm, which promised to keep most of Ascena stores open and continue their business.