All retail bankruptcies are not the same. CNN’s Jon Sarlin explains the difference between reorganization and liquidation when it comes to bankruptcy filings.Most of the retail bankruptcies I report here are filed under Chapter 11, so the companies and their customers have at least some hope of continuing to do business. That's relatively good news. The bad news is that this first video does not go into the causes behind the companies' financial troubles. The next one, Here's how private equity is gutting retail does.
In the bankruptcies of J. Crew, Neiman Marcus, and many others – it wasn't just bad business practices and the rise of e-commerce that did them in. CNN Business' Jon Sarlin explains the perils of leveraged buyouts.As I wrote in Company Man describes the decline of GNC, a tale of the Retail Apocalypse and pandemic, "Usually it's private equity leveraging a company and making it vulnerable to bankruptcy during downturns, which happened to KB Toys, Sears and KMart, Toys R Us, Art Van, J. Crew, and Chuck E. Cheese's." As the video pointed out, I should now add Neiman Marcus to the list. So, don't just blame Amazon and the COVID-19 pandemic for retail bankruptcies and closures; vulture capitalism plays a major part in the story as well.