J.C. Penney, Neiman Marcus and Lord & Taylor are all reportedly considering bankruptcy filings. CNBC recently reported that Neiman Marcus is currently seeking $600 million in emergency funding to keep operating whilst it restructures and J.C. Penney may need to find up to $1 billion, as reported by The Wall Street Journal.
This could be the week that marks the beginning of the end for American department stores as we know them. That’s a bit melodramatic, perhaps, but how else to describe three iconic names — Neiman Marcus, J.C. Penney and Lord & Taylor — all on the brink of bankruptcy. Neiman Marcus could reportedly file as soon as today (27/04/2020). The other two are in advanced talks with creditors, meaning they could follow quickly.
The blame could be pointed at the coronavirus for pushing them over the brink, but the truth is that all three, and some competitors not named here, were headed down this path already. All have too many stores, selling products too similar to what can be found at rivals or online. Discounts alienated brands, while debt piled on in better times soaked up cash that could have helped pivot these businesses. They will need to use bankruptcies to shift some of that debt burden and close stores, or they’ll be back here again before long.
