These 5 Retailers May Not Survive The Coronavirus Pandemic: Here’s Why

Before the coronavirus hit, many retailers were struggling. Several were closing stores and laying off workers. Now because the pandemic has forced nearly every retail store to close, the fate of some of these companies looks grim.

Sears , JC Penney, J.Crew, Neiman Marcus, and Nordstrom are all fighting to stay alive while the lights in their stores remain off because of the COVID-19 crisis. Here’s why these retailers may not survive the coronavirus crisis.

JC Penney

After closing its doors in March until further notice, JC Penney furloughed the majority of its workforce in an effort to reduce costs when sales were at an all-time low. The retailer has been burdened by a reported $3.7 billion debt at the end of 2019 and announced a string of store closures this year and last.

The company closed a call center earlier this year, laying off workers in the process. JC Penney has been working to overhaul its business, but the efforts may not be enough as the coronavirus deals a crushing blow.

“There's a good chance they can survive, but this is no layup," Craig Johnson, president of Customer Growth Partners told CNN. "This is going to be a three-pointer deep in the corner with time running out.”

Neiman Marcus

Like JC Penney, Neiman Marcus is also saddled with significant debt, which is estimated at $4.3 billion, according to Bloomberg. The department store retailer shut its stores during the coronavirus pandemic.

The company is reportedly considering filing for bankruptcy protection and has been in talks with its lenders about restructuring its debt.

J.Crew

J.Crew also has a high debt load at a reported $1.6 billion, CNN said. The company reportedly had previous plans to spin off its Madewell brand but pulled back the IPO as the COVID-19 pandemic hit.

J.Crew closed about 20 stores in 2019 as it looked to focus on the Madewell brand, but has since closed stores due to the impact of the coronavirus.

Sears

Sears has seen its share of troubles over the years. The company filed for bankruptcy in 2018, emerging the following year through a $5.2 billion deal with its former chairman Eddie Lampert.

Since coming out of bankruptcy, the retailer has had a steady flow of store closures under both the Sears and Kmart brands. The company announced that it was closing all of its Sears stores because of the coronavirus pandemic but would keep its Kmart stores open in areas where allowed.

Sears also furloughed most of its employees in the process, including its corporate headquarter workers. The company has not turned a profit since 2010, with $12 billion in losses since that time, the news outlet said.

Nordstrom

Another retailer that the coronavirus could spell the end for is Nordstrom. The company warned that its financial situation could become distressed if its stores remain closed for much longer. Nordstrom closed its stores due to the COVID-19 crisis.

In its Securities and Exchange Commission filing, Nordstrom said, “The longer our stores remain closed to the public, the greater impact it will have on our results of operations and financial condition, and if our physical locations remain closed to customers for an extended period of time our financial situation could become distressed.”

The company has also furloughed the majority of its workers and drawn $800 million on its revolving credit line.