Here Are the Big Retailers Coronavirus Could Put Out of Business

Many nationwide retailers are grappling with what appears to be a new normal in the U.S retail landscape over the next few weeks.

In order to stem the spread of COVID-19 — which has now killed 114 people in the country and sickened more than 6,500 — state and local governments have imposed restrictions on travel, leading companies to shutter their stores or operate at reduced hours and strategize to boost remote purchasing options for consumers.

As the escalating coronavirus outbreak continues to pose a significant threat to retail sales across the board, here are the retailers whose financial positions suggest they might be headed for the chopping block.


Even before the coronavirus hit its home turf, market watchers already appeared to have lost faith in J. C. Penney Company Inc. For several quarters, the chain had been at risk of being delisted from the New York Stock Exchange as declining sales, leadership changes and digital competition spooked investors and pushed its stock below $1. As of 2:30 p.m. ET on Wednesday, shares for JCP had plummeted 24.3% to just 39 cents. In February, it also ended up on the S&P Global Market Intelligence’s list of the “most vulnerable” publicly traded retailers.

Amid an arguably bleak outlook, JCPenney has recently been experimenting with new strategies seemingly aimed at returning the business to its glory days, including tapping into the outdoor and consignment markets as well as launching a curbside pickup program at 50 stores across the country. However, due to government-mandated measures to prevent the spread of COVID-19, the retailer was forced to temporarily close its stores starting this evening until April 2 — almost guaranteeing less foot traffic and subsequently lower sales.


At its investor day in early February, Macy’s unveiled an ambitious three-year turnaround plan that included trimming 125 stores from its total footprint, cutting 2,000 jobs — or about 9% of its corporate workforce — and ramping up investments in both higher-margin private labels and off-price through Macy’s Backstage. It shared expectations for these moves to save the company $1.5 billion annually by the end of fiscal 2022 and expects its top 250 stores to account for 78% of sales by 2021.

But within a couple weeks of the announcement, S&P Global Ratings and Fitch Ratings lowered Macy’s long- and short-term issuer credit ratings. Both agencies’ downgrades suggested a lack of confidence in the department store’s ability to stabilize its business and compete amid a challenging retail environment. “We now project operating performance will deteriorate over the next several quarters, with declines in comparable same-store sales,” S&P added in its research note.

On Tuesday, Macy’s announced the temporary closure of all outposts by the end of the business day until the end of March, including its namesake chain, Macy’s Backstage and Market by Macy’s locations as well as Bloomingdale’s, Bloomingdale’s the Outlet and Bluemercury stores. Despite an upgraded fleet of stores (roughly 150 outposts have recently undergone a “growth treatment” with physical improvements and investments in merchandising, technology and talent), the retailer is expected to face pressure in its attempts to lure in consumers as the coronavirus crisis continues to stall retail operations across the country.

Neiman Marcus

Neiman Marcus Group followed in the footsteps of other retailers in the wake of the outbreak, closing its flagship banner and Neiman Marcus Last Call stores as well as Bergdorf Goodman, starting Tuesday evening and throughout the next two weeks. “We are monitoring the effects [of the virus] in real time, and although we expect it to affect our results for the current period, we are not yet in a position to comment meaningfully on its impact,” said CEO Geoffroy van Raemdonck.

It marked the latest roadblock in the Dallas-based company’s pursuit of profitability. In August 2018, Neiman Marcus announced a four-year transformation plan that has seen it invest in omnichannel and supply chain technology as well as embrace resale through a minority investment in consignment company Fashionphile. However, dwindling foot traffic and the e-commerce boom — on top of a costly debt burden stemming from its private equity buyout back in 2013 — have forced Neiman Marcus to explore a variety of strategies to raise cash, including a potential sale or the IPO of its MyTheresa business. Further, it recently revealed that it would wind down its Last Call off-price business to focus on its luxury department stores, a bold move since off-price is considered one of the few bright spots in the retail sector today.


Retail analysts have been down on J.Crew for some time as it navigates a business rife with executive turmoil and disappointing financial results. Around 2015, amid shifting consumer preferences and spending habits, the New York-based business took on a massive expansion project and attempted to cater to a more upscale audience. They were inevitably missteps that a new loyalty program, collection launches and a third-party marketplace could not fix.

The company also faces upcoming maturities on a significant debt load due in early 2021 and faces potential difficulties in refinancing, which is currently tied to its IPO of women’s clothier Madewell. Proceeds from the offering were intended to pay off part of the company’s term loan. But amid an erratic stock market due to investor panic over the coronavirus outbreak, J.Crew opted to shelve the proposed IPO, initially scheduled to hit the market in early March. Instead, it expects to complete the transaction between March 18 and April 30, allowing the chain “additional time to thoroughly assess all alternatives.”

For the next two weeks until March 28, however, all J.Crew and J.Crew Factory stores will remain shuttered “in the effort to socially distance and do our part to protect and care for our associates, customers and the public health,” explained new CEO Jan Singer.

Want more?

These Retailers Are Paying Workers While Closed Due to the Coronavirus Outbreak

The Coronavirus Is Exposing Critical Vulnerabilities in the Fashion Supply Chain

imbox Sponsored

Customer Experience, Revenue Stream and Sustainability Come Wrapped in an IMBOX

Sustainable, footwear protection technology company, IMBOX Protection, is bringing its in-store service to the U.S. market for increased foot traffic and basket size with a new revenue stream.
Learn More

Access exclusive content