Retail bankruptcies in 2020 hit the highest levels in more than a decade, and experts say there are more to come
There were dozens of retail bankruptcies in 2020, and experts say the pain isn’t over yet.
S&P Global Market Intelligence tallied 49 bankruptcies in the retail space as of mid-November, including Ann Taylor parent Ascena Retail Group Inc. ASNAQ, -1.48%, luxury department store Neiman Marcus, home goods specialists Sur La Table Inc. and Brooks Brothers Group Inc.
That’s the largest number of bankruptcies since 2009, during the financial crisis.
COVID-19 was the straw that broke many ailing retailers. Companies that were already struggling to keep up with trends, invest in necessary digital upgrades and shift to modern customer experiences simply couldn’t cope with the added pressure of store closures, a massive shift to e-commerce, safety protocols and other side effects of the coronavirus.
“The pandemic has accelerated what was going to happen in a number of years in a shorter period of time,” said Mickey Chadha, Moody’s vice president. “The names that have filed for bankruptcy probably were pulled forward.”
In addition to stores closing due to bankruptcy and restructuring, many retailers have been using the pandemic period to reconsider their fleet of stores. Gap Inc. GPS, -0.59% and Children’s Place Inc. PLCE, +1.15% are just two of the retailers that have talked of “rightsizing” their store fleets.
Coresight Research counted 8,401 store closures year-to-date in a Dec. 4 report.
With vaccine distribution ramping up and 2021 around the corner, a retail recovery isn’t going to happen like the flip of a switch. Instead, experts and analysts say there are more retail bankruptcies looming before things get better.
Gold Climbs After House Backs Trump’s Call for $2,000 Checks
Gold ticked higher after the U.S. House passed a bill to boost household checks to $2,000, a proposal backed by President Donald Trump that ramps up the burgeoning cost of pandemic relief measures. The dollar eased.
The plan to raise payments from $600 is in line with Trump’s surprise request last week when he threatened to reject the entire spending package. The dollar weakened after the House backed the plan, which would lift spending on household relief by about $464 billion.
Gold is headed for its first monthly gain in five as optimism over coronavirus vaccines gives way to renewed bets on inflation and a weaker dollar. Economic disruption and mounting global stimulus spending has helped carry gold toward its best year since 2010.
With trading volumes still thin in the holiday season, “precious metals traders were taking the cue of direction from the U.S. dollar in the absence of any new fundamental drivers,” Philip Futures wrote in a note. The U.S. currency hit the lowest since 2018 earlier this month.
CNN Business/Charles Riley
Stimulus is here. But there are some big caveats
President Donald Trump reversed course on Sunday, signing into law a massive $2.3 trillion coronavirus relief and government funding bill that he had objected to at the last minute.
That signature does two important things for the US economy: It averts a government shutdown that was set to begin on Tuesday, and extends billions of dollars in coronavirus aid to struggling Americans.
The estimated 12 million people in two key pandemic unemployment programs, who were facing their last payment this weekend, will now receive benefits for another 11 weeks. Plus, all those collecting jobless payments will receive a $300 weekly federal boost through mid-March.
The relief package also extends eviction protection to January 31 and provides $25 billion in rental assistance for those who lost their sources of income during the pandemic. An estimated 9.2 million renters who have lost employment income during the pandemic are behind on rent, according to the Center on Budget and Policy Priorities.
The caveats: Because Trump did not sign the bill on Saturday, those enrolled in the two unemployment programs will likely not receive a payment for the final week of the year. Their payments could also be delayed several weeks while state agencies reprogram their computers.