What Specific Economic Changes have Scoured the United States?: Businesses That Went Broke #1

It was reported that in 2020, over 200 million shoppers visited many stores, including JC Penney, J.Crew, and CEC. When COVID-19 hit the United States, the first effect most people noticed was the inability to shop or work in stores due to lockdowns. Just as consumers were affected, businesses themselves suffered severe losses.

JC Penney ranks fifth as a leading clothing retailer in the United States. However, during COVID-19, JC Penney hit a new low point. The struggle to survive had been ongoing, with billions lost in the 2010s and hundreds of stores closed. The company had been slowly rebuilding itself through the Plan for Renewal strategy, and recovery seemed optimistic. However, all efforts were dashed when the US encountered COVID-19. Immediately, JC Penney's debt increased to $5 billion, and sales plummeted by 50%.

Victoria’s Secret and Bath and Body Works are part of L Brands and are extremely popular among young people, especially Victoria’s Secret, which targets women aged 18-34. Nevertheless, with the arrival of COVID-19, a report showed a net loss of $296.9 million. Revenue a year prior amounted to $2.63 billion, but it plummeted to only $1.65 billion in 2020. Victoria’s Secret alone lost 46% of total sales and 15% in-store comparisons. A six-day closure resulted in a 15% decline in sales.

References: 

Reeth M. 7 Companies That Went Bankrupt Due to COVID [Internet]. US News & World Report. U.S. News & World Report; 2021. Available from: https://money.usnews.com/investing/stock-market-news/slideshows/covid-bankrupt-companies 

Hirsch L. Long-struggling JC Penney files for bankruptcy as coronavirus crushes hopes for a quick turnaround [Internet]. CNBC. 2020. Available from: https://www.cnbc.com/2020/05/15/jc-penney-bankruptcy-filing.html 

Markowitz A. 12 Iconic Retailers Sink Into Pandemic Bankruptcy [Internet]. AARP. 2021. Available from: https://www.aarp.org/money/credit-loans-debt/info-2020/bankrupt-retail-chain-store-list-is-growing.html 

Coronavirus prompts Victoria’s Secret to permanently close 250 US, Canada stores [Internet]. FOX Business. 2020. Available from: https://www.fox13news.com/news/coronavirus-prompts-victorias-secret-to-permanently-close-250-us-canada-stores 

The Power of Seduction: Victorias Secret Target Audience Revealed - Osum [Internet]. Osum. 2024 [cited 2024 Apr 29]. Available from: https://blog.osum.com/victoria-secret-target-audience/#:~:text=In%20terms%20of%20demographics%2C%20Victoria 

Bath & Body Works | Rochester, MN 55902 [Internet]. www.experiencerochestermn.com. [cited 2024 Apr 29]. Available from: https://www.experiencerochestermn.com/listing/bath-%26-body-works/1804/