COVID-19 has affected countless businesses over the course of the last six months, so it’s been no surprise to see so many retail companies forced to file for bankruptcy or liquidate.
While certain businesses have been able to pull through due to their e-commerce sales, others haven’t been as lucky.
In fact, the major department stores appear to be the businesses that have been hit the hardest, as people just aren’t out shopping right now like they were a year ago.
Read on to learn more about the liquidation process as well as find out which companies have been forced to liquidate in 2020.
What is Liquidation?
For those who don’t know, liquidation is essentially when a business sells its inventory and other assets.
They are then forced to close their business and give what they made on their inventory and assets among creditors.
Liquidation sales are often associated with bankruptcy filings, but not all the time. In fact, sometimes businesses will liquidate their inventory if they are planning on making a big move.
However, due to the current financial situation so many companies find themselves in, liquidation is not a positive step forward.
Companies Who’ve Liquidated
Here are some of the companies that have been forced to liquidate:
- Schurman Group (Papyrus): The Shurman group, which is the parent company of Papyrus, Paper Destiny, American Greetings, and Carlton Cards began a full-scale liquidation in January, following by entering Chapter 11.
- Pier 1: The home goods company has been trying for years to rebound, but COVID-19 was certainly the nail in the coffin. They were hoping to find a buyer but ended up liquidating their business in May. However, they were able to see their intellectual property and online assets for $31 million to Retail Ecommerce Ventures.
- Modell’s Sporting Goods: Modell’s entered Chapter 11 in March and planned to liquidate all of their stores. They ended up selling their intellectual property to Retail Ecommerce Ventures for $3.6 million.
- Lord & Taylor: Hudson’s Bay sold Lord & Taylor to Le Tote for $75 million in 2019, but they weren’t able to save the longtime department store chain. The company filed for bankruptcy in August.
- Stein Mart: Stein Mart looked like it was going to be able to survive earlier this year, but after COVID-19 cases surged in Texas, California, and Florida (where most of the Stein Mart stores are located) that was no longer the case. Stein Mart moved to liquidate their inventory and as of right now have not been able to find a new buyer.