By Nishtha Garg
The coronavirus pandemic has accelerated the demise of companies that were already in trouble as people (and their currency notes) stay home amid lockdowns and economic shutdowns. Here are the major companies with at least 500 employees that have filed for bankruptcy in 2020.
1. CEC Entertainment (Chuck E. Cheese)
Filed for bankruptcy: June 25, 2020
The 600-plus restaurant chain — whose pizza, arcade games and (until it was retired in 2019) animatronic band fueled countless raucous kids’ parties — was especially hard-hit by a pandemic that halted dining out and large gatherings virtually overnight. The company saw revenue plummet by 90 percent, increasing pressure to deal with nearly $1 billion in long-term debt.
2. Guitar Center
Filing date:Nov. 21,2020
Founded in 1959 as a single store selling organs, Guitar Center eventually became the largest musical instrument retailer in the U.S., with more than 500 stores across its brands. After a private equity buyout, it struggled under its debt load throughout the 2010s.When the pandemic forced it to close its stores, Guitar Center ran into liquidity problems.
3. J.C. Penney
Following more than a century in business and a years-long sales slump, J.C. Penney filed for Chapter 11 bankruptcy protection in mid-May. Weighed down by debt, it was struggling long before the pandemic, but the Covid crisis exacerbated its problems. Penney, which employed roughly 90,000 full- and part-time workers as of February, has closed more than 150 locations since its bankruptcy filing. Another 15 stores will close by March, it said earlier this month.
4. Paper Source
The third major stationery chain to declare bankruptcy in a little over a year, Paper Source filed for Chapter 11 in March and closed at least 11 of its nearly 160 stores. The company grew rapidly in recent years, but pandemic-related closures kept stores dark last year during big holidays like Easter and Mother’s Day. A rival chain, the Paper Store, filed for bankruptcy over the summer, and mall staple Papyrus liquidated and closed all of its stores in early 2020.
5.Virgin Atlantic and Virgin Australia
Airlines were one of the first industries to feel the pain of the pandemic. Virgin Atlantic joined the fray in August 2020, filing for Chapter 15 bankruptcy as it worked to firm up a bailout aided by the British government. Its sister airline, Virgin Australia, had already filed for bankruptcy in April after the Australian government decided against a massive bailout. Delta owns 49% of Virgin Atlantic.