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These Major Global Companies Have Filed for Bankruptcy Amidst the Pandemic

These Major Global Companies Have Filed for Bankruptcy Amidst the Pandemic

Not even the big businesses are spared.

The COVID-19 pandemic has turned the paradigm of consumerism and cities upside down. The whole point of of cities was to get crowds together for collaborative work. Entertainment and luxuries are born out of thriving cities and since the lockdown, big businesses are not spared because of the very nature of their products.

The Aldo Group

The Canadian-based shoe retailer filed for bankruptcy on May 7. It was listed to have approximately 3,000 stores in 100 countries. As of posting, the company is still coming up with a restructuring and development plan. The business continues to operate online through e commerce websites and will re-open most of its store in line with local health protocols.

Gold’s Gym

One of the biggest and widely known fitness centers filed for bankruptcy on May 4. Gold’s Gym public announcement has gained a lot of attention in social media garnering millions of shares on Facebook. The company has reiterated that they will again open in accordance to local guidelines and insisted that they’re not going anywhere.

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J. Crew

One of the biggest American retail brands has also been largely affected by the pandemic and filed for bankruptcy on May 4. With restructuring for long-term success in mind, their lenders and shareholders agreed to convert $1.65 Billion worth of funded debt to Equity. J.Crew will still continue to operate once allowed by local regulations.

Virgin Australia

Australian airline Virgin Australia, one of the largest airlines in the country, also filed for bankruptcy on April 21. With a lot of travel ban on international flights, the airline business has been crippled by the pandemic. And it seems Virgin Australia is one of those affected the most. It is still unclear if the company will continue to operate but there’s a potential it may lead to a sale.

Forever 21

Even three months before the pandemic spread throughout China in December 2019, Forever 21 has already filed for a Chapter 11 bankruptcy. The initial plan was to close more than 100 stores worldwide and save the rest of the business. In February of this year, a deal to sell majority of its assets was agreed upon with Simon Property Group. Just a month into the deal, however, the buyer was forced to close all stores because of the pandemic. What a tough timing, right?

GNC Holdings

GNC has already been forced to close down at least 304 stores this year. “We believe conditions for GNC are deteriorating substantially due to the coronavirus pandemic, the anticipated macroeconomic downturn and the limited access to capital markets,” S&P Global Ratings reported. The company’s product retailer’s rating has also been downgraded due to their “likely inability to pay debt”, says S&P.

Business in the Philippines

In the Philippines, over 2,000 companies have already ceased operations and permanently closed down their businesses due to the pandemic. Local blue chip companies have also taken a big hit but it seems they’re managing to stay alive. Unfortunately, many employees have lost their jobs therefore their source of living. Philippine Statistics Authority stated that unemployment rate is already at 17.7 percent, the lowest in decades. With the NCR slowly opening up the economy, life returns … to a new normal.

Is there a silver lining? The post-pandemic economy in the Philippines has brought about change in how businesses operate. It’s made people realize the importance of front liners, efficient public transportation, bike lanes, delivery services, and how affected the marginalized sector is. It has made businesses see that working from home can work, but it also has made employees feel that the barriers to work / life balance are slowly being broken. It is telling parents that they need to rethink what it means to send kids to school as indefinitely all learning will be online.

The disparity is a line drawn in the sand: “we are all in the same storm but are in different boats.”

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