Countless Businesses Have Failed Misrably Due to 2020. Here Are the 10 Most Notable Ones.
Being the kind of year 2020’s been, it isn’t hard to come up with a list of businesses that have failed in the last twelve months. The hard part is narrowing it down to 10.
Among the many other undesirable things it brought us, 2020 has been a year of business failures. For this list, we’ve selected ten well-known companies from a range of industries, to give a snapshot of the bigger picture.
Keep in mind, that just because they failed, doesn’t mean they’ve disappeared. The companies on this list filed for bankruptcy in 2020. Which doesn’t have to be the kiss of death. Bankruptcy filings give companies a chance to negotiate their debt with creditors.
Some of the names on this list have already been bought by new owners and will still operate under the brand name. For others, the story’s ongoing. And for a few, which we’ll point out, sadly it looks like 2020 is the last time we’ll be seeing them in action.
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Failures can be tiring to read about – here’s a video version of this article.
With that out of the way, let’s get into it.
Not all companies that went bankrupt in 2020 can blame their woes on the pandemic. And in the case of American card retailer, Papyrus, that’s clear. Because they filed for bankruptcy before the pandemic hit.
If you don’t know them, Papyrus were a staple of American malls, known for selling upmarket greeting cards, often featuring fabrics, glitter, buttons and other eye-catching designs. As well as selling a variety of other luxury paper products.
Back in January, Papyrus’s parent company, Schurman Retail Group, found themselves overloaded with debt, with their liabilities of $54 million, assets of just 39 million. That’s when they filed for bankruptcy and announced the closure of Papyrus, and their two sister companies. All told, that accounted for 250 stores, and over a thousand jobs.
So if it wasn’t COVID that spelt their downfall, what was it? Well, it seems that their main problem was failing to keep in step with consumer trends. Greeting cards were still the main part of their business — even though, for more and more people, an emoji sticker or virtual card does just fine. And Papyrus calendars may have looked great — but not good enough to stop people from using the calendars on their phones.
Next, a huge name in American retail, with 840 locations across the USA, and over a hundred years of history. JCPenney was once one of the USA’s leading department stores. But their bankruptcy announcement came after years of business problems. And in this case, it was the pandemic that pushed them over the edge.
In its heyday, JCPenney was known as the budget department store, the place to go bargain-hunting.
Over time, its unglamorous and unexciting image led to it was losing market share to more inspiring competitors. And about a decade ago it set out to reinvent itself as a hip place with coffee bars and boutique shops in larger stores. Which only had the effect of alienating its core customers — who really were just interested in the bargains. At the start of the year, it hadn’t turned a profit in a decade.
JCPenney filed for bankruptcy on May 15th, citing disruptions caused by the pandemic as the last straw. In September, management announced they’d reached a deal to save it from closing down. And the company was bought out by property owners, Brookfield Property Partners and Simon Property Group for around $800 million in cash and debt.
One of the most highly publicized business failures from the last twelve months was the story of American car rental firm Hertz. With branches in 150 countries, they’re a familiar sight all over the world, especially at airports, where their fleets of cars await travellers.
In May, they found themselves in hot water, unable to pay off debts of $400 million. That’s when they filed for bankruptcy, citing a sharp decline in revenue caused by the pandemic.
So, what made Hertz so vulnerable, when competitors like Avis and Enterprise survived? The answer seems to be their business model, which depended on selling cars once they’d been retired from their fleet — and relying on this income stream to pay back creditors. But in the pandemic, the second-hand car market came to a halt too. And Hertz took a double blow as they couldn’t pay their debts.
They’re still in the process of selling off a large chunk of their 500 000-strong car fleet to get their finances in order.
During the pandemic gyms have been closed to stop the spread of the virus, and had their capacity reduced for social distancing. So, it’s no surprise to see one on the list. And the gym we’re talking about is probably the world’s best-known. With locations on six continents, it’s nicknamed the Mecca of bodybuilding, and is endorsed by the king of bodybuilding, Arnie himself.
In March their US locations were temporarily closed during lockdown. And on May 4th, they filed for bankruptcy for their US operations. Soo after, they announced they were closing 30 locations.
Since then, German fitness company RSG has stepped in, and purchased Gold’s Gym International for $100 million.
And it’s worth pointing out that Gold’s are far from the only fitness club affected. We’ll still be able to work out in Gold’s locations, even if they’re under a different management. But we can’t say the same for Yogaworks, which closed permanently in September, or Flywheel Sports, which is gone for good as well.
Would you like to know about 5 crucial accessories for your training sessions? read 5 Essential Gym Accessories For your Gym Workouts
Gnc Health Supplements
Another world-famous health and fitness brand — in this case, that sells health and nutrition-related products, including vitamins, supplements, sports nutrition and energy products. And has outlets in 50 countries.
Like many others on this list, GNC had been in trouble for years, as a result of retail struggling. And back in June 2019, they announced plans to shut down 900 mall locations due to slumping sales.
GNC filed for bankruptcy on June 11th. In September they were sold to Chinese-based Harbin Pharmaceutical Group for $770 million — setting the stage for GNC’s entry into the Chinese market.
We all know that restaurants have been high on the list of the casualties this year. And the same goes for arcades and amusement parks. The next company on our list fits into both of these categories.
They’re the parent company of American family restaurant chain, Chuck E. Cheese. And their locations also feature family entertainment like arcade games, amusement rides and animatronic displays. And they’re active in 16 countries.
CEC Entertainment filed for bankruptcy on June 25th, unable to do business during the pandemic. Filing for bankruptcy allowed them to find $200 million in loans to restructure their operations and get their finances in order.
Another sector that was badly hit in 2020 was clothing retail. And Brooks Brothers are the granddaddies of the clothing retail business in the USA, being the oldest company in this sector. And having stores in 70 countries, and the fact that they’ve outfitted 41 of the 45 American presidents until now doesn’t seem to have helped them much.
Brooks Brothers filed for bankruptcy on July 8th, after suffering losses during the lockdown. At the time, they announced plans to close 51 stores. In August, they were acquired by SPARC, a joint venture partly made up of Simon Property Group, who owned a large number of properties they operated from.
These Canadian footwear retailers owned 3000 locations in over 100 countries. And they’d suffered a few years of bad sales, down to the decline in spending in brick-and-mortar stores.
And soon into the pandemic, they found themselves in debt to the tune of over $200 million — again, because of stores being closed under lockdown.
On May 7th they filed for bankruptcy in Canada, the USA and Switzerland. Soon afterwards, ALDO UK went into administration — their UK stores were soon bought by Bushell Investment Group. And they closed down all operations in Ireland. In most other countries they’re still operating, but restructuring their finances.
After a poor run of years for oil prices, 2020 has topped them all and been a catastrophe for the oil industry. And it’s not that hard to figure out why — less travel less by car and plane, and less industrial production all means lower demand for oil.
Just to get an idea of how bad it was — back in April, for the first time in history, oil prices went below zero. That’s because oil producers ran out of space to store the oversupply of crude. And it meant traders were paying people to accept oil. Since then, they’ve got back up to somewhere between $40 and $45 a barrel.
Big producers like Exxon Mobil, Royal Dutch Shell, BP and Chevron cut spending by a fifth. But remember, these big players have a safety cushion keeping them comfortable.
The same can’t be said for smaller oil outfits. Like the one on this list — Diamond Offshore — a Houston-based drilling company has large operations in the Gulf of Mexico. They’re one of 19 American oil and gas companies that filed for bankruptcy in 2020, after demand for their services went south. First because of a price war between OPEC and Russia. And then the pandemic came along and made it a whole lot worse.
Since then, the company has been in other kinds of trouble — namely, for taking Coronavirus aid money to bail themselves out, which was intended for small businesses.
And they’re certainly not the only oil company that have filed for bankruptcy. Others include Gavilan Resources, Whiting Petroleum, Echo Energy Partners and Skylar Exploration.
This year, travel ground to a halt. And even when it was possible, it was at a reduced capacity, due to social distancing. And like other sectors we’ve included here, there are a lot of companies we could have chosen.
Over 40 major carriers around the world have filed for bankruptcy. And LATAM may not be a name everybody knows — depending on where in the world you are — but we’ve put it on the list because it’s the largest carrier to have crashed in 2020.
Chilean-based LATAM is the Latin America’s largest airline. Just before the start of the pandemic, it was healthy and profitable, and carried 70 million passengers last year. But with the pandemic, it was forced to cut operations by 95%. It soon found itself $40 billion in the red. And was forced to lay off 1800 workers and cut the salaries of remaining staff by half.
Currently, LATAM is still operating at a reduced capacity while restructuring its debt.
And let’s give a mention to just a few of the other airlines that have filed for bankruptcy, or suspended operations. These include Colombia’s flagship carrier Avianca; Virgin Australia, UK’s Flybe; Alaska’ RavnAir; South African Airlines; India’s Air Deccan; Air Mauritius; Sweden’s BRA.
And a couple that have totally ceased operating — Miami Air International and Air Italy.
As we mentioned before, there’s a hell of a lot of companies that went bankrupt this year, and we only had time to mention a few of them. Which other ones do you think we should have included?