Neiman Marcus filed for Chapter 11 bankruptcy Thursday morning, the latest national retailer to suffer declining revenue and sales during the global coronavirus pandemic.
Last month, the company furloughed thousands of employees in the wake of COVID-19.
The filing will help the company eliminate about $4 billion in debt. The luxury retailer had already been struggling even before the pandemic began, as reported by CNBC.
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Earlier this week, J.Crew filed for Chapter 11, just over three months after the first person in the U.S. tested positive for COVID-19.
More bankruptcies across the retail sector are expected in coming weeks with most stores still closed, though states have begun a staggered restart to their economies.
»MORE: 33 million Americans have filed for unemployment since pandemic hit U.S.
Sales at stores and restaurants plunged in March by the largest amount on records that date back to 1992. That threatens the overall health of the U.S. because consumers drive 70% of economic activity in the country.
Parts of the retail sector were already under duress before the arrival of COVID-19 due to seismic changes in what is bought and how. The most vulnerable are losing the ability to pay bills.
Based in Dallas, Neiman Marcus had temporarily closed its 43 locations, roughly two dozen Last Call stores and its two Bergdorf Goodman stores in New York. It expects to emerge from bankruptcy this fall.
Macy’s, Gap and Kohl’s have all had to close their doors and furlough workers since last month, when the country began to experience a spike in COVID-19 cases and deaths.
For Neiman Marcus, the financial woes began well before March. In recent years, the company had tried to delay bankruptcy protection and push out due dates for its financial obligations after a restructuring last year.
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