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The 5 most startling retailer bankruptcies since 2020

The pandemic sent waves through the economy, and since its onset, many businesses have filed for Chapter 11 bankruptcy. These are five of the most surprising…

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When a business files Chapter 11 bankruptcy, that doesn’t mean it has declared itself kaput — far from it. 

Filing Chapter 11 is like sending out a SOS signal: It allows the business to keep operating while attempting to restructure operations and pay down its debts (unlike a Chapter 7 bankruptcy filing, which closes the company and liquidates its assets). The recovery rate of a business filing Chapter 11 is said to be anywhere between 10% and 40%.

But no two Chapter 11 bankruptcies are alike. You might be surprised to hear that some of the world’s largest companies — such as American Airlines, Marvel Entertainment, and General Motors — have filed Chapter 11 at one point, but through mergers, new revenue streams, or simply by operating smarter, all managed to crawl back to profitability. 

Other big names weren’t as fortunate: Funeral rites were observed for Lehman Brothers and WorldCom, for example, because they had been operating fraudulently — even though some argued, in the case of Lehman, that they were “too big to fail.”

Related: Boeing's turbulent descent: The company’s scandals & mishaps explained

How many businesses have filed Chapter 11 since the COVID-19 pandemic?

The COVID-19 pandemic, caused by the SARS-CoV-2 virus, not only made millions of people very sick; it also had a profound impact on the way we live, work, and shop. At the onset of 2020's stay-at-home-orders, hundreds of restaurants shuttered, including household names like Ruby Tuesday, California Pizza Kitchen, and Sizzler. 

According to U.S. Federal Courts, business Chapter 11 filings spiked in 2020 while Chapter 7 filings actually decreased. But as vaccines were developed and people returned to work and school, they also resumed their former shopping habits — in fact, mall traffic in 2023 was down only 5.8% compared to 2019, which is much better than it was in 2021, when it was off 15%. 

Yet more turbulence was felt in the years following the pandemic, as government stimulus from the CARES Act, which had helped many businesses make payroll and meet other operating expenses, expired in 2021.

Bankruptcy filings by chapter 2019–2023

Source: U.S. Courts

YearChapter 7Chapter 11

2023

261,277

7,456

2022

225,455

4,918

2021

288,327

4,836

2019

480,201

7,020

Through such choppy waters, we examine a few of the biggest-name retailers that went belly up  — and which ones have risen from the ashes under new management.

5 big-name Chapter 11 bankruptcies in retail

Rite Aid plans to close roughly 10% of its 2,300 locations in 2024.

FREDERIC J. BROWN/AFP via Getty Images

Rite Aid

It was the country’s third-largest drugstore chain — only Walgreens and CVS were bigger — but thanks to sluggish sales, mounting debt, and federal investigations into whether it illegally filled prescriptions during the opioid crisis, Rite Aid filed Chapter 11 in October 2023. 

Earlier in the year, the chain had reported a $241 million quarterly loss due in part to a reduction in revenue from COVID-19 vaccines and rapid tests. Rite Aid simply couldn’t keep up with the convenience of shopping at the pharmacies at big-box stores like Walmart, Target, and Costco. 

As part of its Chapter 11 agreement, the company secured $3.5 billion in financing and appointed a new chief executive, Jeff Stein, to lead its corporate reorganization. Rite Aid also planned to close 200 stores in 2024 but not before transferring customer prescriptions to nearby pharmacies. In addition, it gave its 45,000 employees the option to transfer to other stores “when possible.” 

Related: How much does Walgreens pay? Entry-level positions, benefits & more

Who would have thought that Bed Bath & Beyond would get scooped up by one of its biggest competitors?

Bed Bath & Beyond

Many people thought Bed Bath & Beyond’s days were numbered when it filed Chapter 11 in April 2023 — after all, it closed all 376 stores across the U.S., and its stock was terminated from the over-the-counter trading market. This came after reporting a quarterly loss of $393 million and on the heels of several years of declining sales, competition from online home goods retailers like Wayfair, and a snarled COVID-19-related supply chain

Plus, who could forget BBBY’s meme stock trading frenzy in January 2021, when Reddit contributors drove up prices 99%, only to come crashing back down? When the dust settled, Overstock bought the business for a blue-light special of $21.5 million in June 2023, then took its name and merged businesses. 

Bed, Bath & Beyond now sells kitchen, bath, and furniture completely online and has added more than 600,000 new products to its inventory.

J. Crew is using big discounts to lure back customers.

J. Crew

The first big retailer to capsize during the pandemic, J. Crew filed Chapter 11 in May 2020. But it wasn’t only the fact that retail sales in general withered at the start of COVID-19 — the Commerce Department reported a 50% decline in sales in March 2020 alone — J. Crew had also been saddled with $1.7 billion (that’s with a b) in long-term debt, which weighed heavily on its balance sheet even while its operations were profitable. 

The upscale lifestyle apparel seller received a $400 million line of credit from hedge fund Anchorage Capital Management, which became majority owner and, combined with additional loans from Davidson Kempner Capital Management LP and Bank of America, managed to convert its debt into equity, exiting bankruptcy proceedings that August. 

But J. Crew is not out of the woods. Ever since creative director Jenna Lyons left in 2017, it has yet to come out with a line of clothing consumers want to pay full price for, and Standard & Poor’s downgrade of parent company Chinos Intermediate 2 LLC from “stable” to “negative” in the third quarter of 2023 raised alarm bells. 

However, the preppy chain posted a 9% sales increase for its fiscal year ending February 1, 2024,  due in part to holiday sales, which slashed apparel prices by as much as 75%. Paradoxically, J. Crew just might now be one of the best stores to shop at for discounts.

Related: A pre-IPO History of Reddit: From “front page of the internet” to billion-dollar valuation

The beleaguered clothing stalwart has ambitious plans for 2024.

Justin Sullivan/Getty Images

JCPenney

You’d think a company that survived two World Wars and made a cameo in "Back to the Future" could stand the test of time — and it just well might. Founded in 1902 by James Cash Penney as a dry goods store in Kemmerer, Wyoming, the chain expanded throughout the American West before introducing clothing to its lineup in the 1960s. 

Wisely venturing into the pharmacy business, launching a mail order catalog, and offering customers the option to make their purchases through credit paid off in spades, Penney’s peaked in the 1970s with more than 2,000 stores worldwide. But after decades of declining sales, accumulating a boatload of debt during the 2007-2008 financial crisis, and losing customers in droves to Target and Walmart (a familiar refrain), the COVID-19-related closure of Penney’s 800 remaining stores in early 2020 seemed like the final nail in the aging retailer's coffin. 

JCPenney filed Chapter 11 that May, only to emerge, phoenix-like, eight months later. The brand permanently closed 200 stores, restructured its $4 billion debt, and took on two new owners — they just happened to be the country’s largest shopping mall owners, Simon Properties and Brookfield Asset Management, thus ensconcing Penney’s place as a retail “anchor.” 

In 2021, Mark Rosen, formerly of Levi Strauss & Co., became CEO, and in 2023, he announced $1 billion worth of upgrades to the JCPenney website and app, as well as renovations of its brick-and-mortar stores. Here’s the cincher: Doing so wouldn’t require taking on any more debt. “We’re in a really strong financial position right now,” Rosen said.

The COVID-19 pandemic boosted Guitar Center's online sales but couldn't replace losses from its store closures.

AaronP/Bauer-Griffin/GC Images

Guitar Center

It’s hard to believe this mecca for rock n’ roll musicians was originally called Organ Center and sold church organs and small appliances. That all changed in 1964, shortly after The Beatles came to America, when one of owner Wayne Mitchell's vendors told him that he needed to buy Vox amplifiers in order to continue purchasing organs. 

Mitchell figured that if he was selling amps, why not stock a few guitars, too? They quickly sold out; Mitchell changed his store’s name, and the rest was history. Riding the hair metal craze of the 1980s that glorified guitar virtuosos like Eddie Van Halen, Guitar Center expanded into 30 locations by the 1990s. It also diversified its portfolio with acquisitions of Musician’s Friend, a mail-order musical instrument company; Music & Arts, which provided in-store music lessons; and in the early 2000s, partnered with Activision, the video gaming giant, on its smash hit “Guitar Hero.” 

But the good times and rock & roll didn’t last forever. Over the next decade, Guitar Center underwent a series of leveraged buyouts from private equity firms, each time saddling it with more debt. It tried cutting costs by stocking fewer name brands and laying off staff — many of whom had decades of experience that justified their salaries. 

Customers noticed the changes and simply stopped coming, shopping online instead. But right before the pandemic, Guitar Center staged a comeback, posting 10 straight months of sales growth, but while new audiences were found for guitars and online lessons during the COVID-19 lockdown, Guitar Center faced the double whammy of seeing $1 billion in debt come due and the closure of its brick-and-mortar stores. 

It entered Chapter 11 in November 2020, although its management team already had a strategy in place. It invested $165 million in the company while eliminating most of its debt. Guitar Center also issued $375 million in senior secured bonds and exited Chapter 11 that December.

Related: Is shrinkflation a big deal? Definition, examples & impact on headline inflation

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New diagnostic tool achieves accuracy of PCR tests with faster and simpler nanopore system

Over the past four years, many of us have become accustomed to a swab up the nose to test for COVID-19, using at-home rapid antigen tests or the more accurate…

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Over the past four years, many of us have become accustomed to a swab up the nose to test for COVID-19, using at-home rapid antigen tests or the more accurate clinic-provided PCR tests with a longer processing time. Now a new diagnostic tool developed by UC Santa Cruz Distinguished Professor of Electrical and Computer Engineering Holger Schmidt and his collaborators can test for SARS-CoV-2 and Zika virus with the same or better accuracy as high-precision PCR tests in a matter of hours.

Credit: Mohammad Julker Neyen Sampad, UC Santa Cruz

EMBARGOED UNTIL APRIL 8, 2024 AT 3:00 PM U.S. ET/ 12:00 PM PT

Over the past four years, many of us have become accustomed to a swab up the nose to test for COVID-19, using at-home rapid antigen tests or the more accurate clinic-provided PCR tests with a longer processing time. Now a new diagnostic tool developed by UC Santa Cruz Distinguished Professor of Electrical and Computer Engineering Holger Schmidt and his collaborators can test for SARS-CoV-2 and Zika virus with the same or better accuracy as high-precision PCR tests in a matter of hours.

In a new paper in the journal Proceedings of the National Academy of Sciences, Schmidt and the project team describe their system, which combines optofluidics and nanopore technology to create a lab-on-a-chip diagnostic system. The team’s success with animal models makes them hopeful that this technology could be a major innovation for the future of rapid diagnostics. 

“This could turn into the next big diagnostic system,” said Aaron Hawkins, a professor of Electrical and Computer Engineering at Brigham Young University and a senior author on the paper. “You get sick, you go to the hospital or doctor, and their tests rely on this technology. There’s a path where this could be installed right there [in a hospital or clinic], so you wouldn’t have to wait to get your results.”

This research is a result of longstanding collaboration between Schmidt, Hawkins, and Professor Jean Patterson at the Texas Biomedical Research Institute. 

Faster and more accurate tests

While PCR testing is currently the gold standard of accuracy for virology testing, the method falls short in several ways. PCR tests are highly complex and require chemical reactions that must be performed by skilled operators, typically at a central laboratory, sometimes taking days to get testing results back. These complex reactions are needed for the amplification of viral DNA or RNA, a process of making multiple copies of the genetic material that can introduce and amplify error. 

PCR tests can also only detect nucleic acids, the material that makes up DNA and RNA. But in the case of some diseases, it can be incredibly useful to detect other biomarkers such as proteins.

The new diagnostic tool solves both of these problems. It requires little sample preparation and is completely amplification-free and label-free, the latter meaning it does not use light to identify biomarkers. This dramatically cuts down the time and complexity of the diagnosis process.

“The potential is enormous,” Patterson said. “The idea that you don’t have to amplify to get accurate results is a huge advance, on par with how PCR was an incredible step forward when it came out.”

Diagnostics design

The new diagnostic system combines Schmidt’s area of expertise in optofluidics, which is the control of tiny amounts of fluids with beams of light, with a nanopore for counting single nucleic acids to read genetic material. The tool was designed to test for Zika and COVID-19 viruses, which have been particularly medically relevant in recent years and priority areas for the National Institutes of Health, which funded this research. 

“We built up a simple lab-on-a-chip system that can perform testing at a miniature level with the help of microfluidics, silicon chips, and nanopore detection technologies,” said Mohammad Julker Neyen Sampad, Schmidt’s graduate student and the paper’s first author. “Simple, easy, low resource tool development was our goal — and I believe we got there.” 

To run the test, a sample of biofluid is mixed in a container with magnetic microbeads. For this study, the researchers used biofluids including saliva and blood from baboons and marmosets at Texas Biomedical Research Institute.

The microbeads are designed with a matching RNA sequence of the disease for which the test is designed to detect. For example, if it’s a COVID-19 detection test, the microbeads will have strands of SARS-CoV-2 RNA on them. If there is SARS-CoV-2 virus present in the sample, the virus’s RNA will bind to the beads. After a brief waiting period, the researcher pulls the magnetic beads down to the bottom of the container and washes everything else out. 

The beads are put into a silicon microfluidics chip designed and fabricated by Hawkins’ group, where they flow through a long, thin channel covered by an ultra-thin membrane, the design of which Hawkins calls an “engineering miracle.” The beads get caught in a light beam that pushes them against a wall in the channel, which contains a nanopore, a tiny opening just 20 nanometers across — for comparison, a human hair is about 80,000 – 100,000 nanometers wide.   

The researchers apply heat to the chip, which makes the RNA particles come off the beads and get sucked into the nanopore, which detects that the virus RNA is present.

Promising results

Their trials showed that the test correctly detected the virus for each sample that the PCR test was able to detect, even at extremely low concentrations of the virus. There were instances in which the PCR test was not able to detect a case of one of the viruses while Schmidt’s system did, showing their system can be more accurate than PCR.

Overall, the microfluidics system is much smaller and less complex than a PCR machine. If this concept is brought to market as a product, its compact size could easily fit in a researcher’s lab, enabling much faster results for virology testing, increasing testing accessibility and speeding up the time to results from days to hours.

“If we build an instrument out of this system, a researcher could have that in the biosafety level-4 lab where it never leaves the room, and you can just drop in a little sample liquid, and run the test in an hour,” Schmidt said. “I think that would help speed up the testing.”

The test was run with six different biofluids, including saliva, blood, and throat swabs, which may contain different viral loads. This can enable researchers to better study how diseases pass through the body of different animals. 

While at the current stage the test was developed to detect SARS-CoV-2 and Zika viruses, researchers could make adjustments to find any virus for which they have a genetic sample. In future developments, they plan for further simplification and minimization of the system, as well as enabling it to test for multiple types of disease at once, a feature called disease multiplexing. 

Schmidt also intends to use this concept to develop diagnostic tools for cancer biomarkers and other health conditions that leave traces of DNA/RNA or protein in the body. It will likely be a few years before this concept is commercialized and brought to market. 


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These National Parks are the most expensive to visit

A new report looks at the cost of entry fees at the country’s national parks.

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While the 63 national parks spread across the U.S. are an inextricable part of American culture, visiting all of them is by no means a cheap endeavor.

Many are not easy to access without a car and, along with the usual travel and accommodation costs of going to so many states and territories, the parks themselves also charge visitors fees at different points in their visit. Sometimes this is exclusively for “extras” such a spot on a camping site but, increasingly, parks have been either raising or introducing entry and parking fees amid overcrowding.

Related: I visited two of the country's most underrated National Parks — here's what it was like

The most expensive national park in the U.S. is, as travel journalist Stephen Hanson recently identified in a fare comparison, the Gates Of The Arctic National Park & Preserve in Northern Alaska.

Veronika Bondarenko captured this view at the New River Gorge National Park in West Virginia.

Veronika Bondarenko

This is the most remote (and often most expensive) national park to visit

Often dubbed the “most remote national park in the U.S.,” the Gates of the Arctic has no entry fee but is incredibly costly to get to due to its location in the far north of the Arctic. Without direct road access, the only way to get there is to fly from Anchorage to the nearest small settlement such as Kotzebue or Anaktuvuk Pass by charter plane. The Arctic terrain also means visitors often need to hire guides, pay inflated prices for the limited accommodation and bring special gear.

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“While many beautiful national parks in the US are well worth a trip despite their remote setting, Gates of the Arctic National Park & Preserve requires a particularly dedicated resolve from any traveler who wants to visit,” Hanson writes. “Though prices can vary depending on the length of the trip and the destination, passengers can expect to pay anywhere from a few hundred to a few thousand dollars for a ticket.” 

Channel Islands National Park off the coast of Southern California is the country’s second-most expensive in the U.S. for a similar reason. The five Channel Islands sit in the Pacific Ocean and can only be accessed by ferry from Ventura Harbor. Depending on the time of day and year, the three-hour ferry ranges in price from $60 to $120 (the park itself, once you get there, has no entry fee.)

These national parks are also very expensive (here is why)

Parks that are easily accessible by car but have high entry fees due to overcrowding include Yosemite in California’s Sierra Nevada Mountains and Glacier National Park on the border between Montana and Canada’s British Columbia. 

Both parks charge each vehicle coming in a $35 entry fee on top of additional additional fees for staying there overnight. In 2021, Yosemite raised the camping fee from $6 to $10 per person to keep up with the cost of running the park amid growing numbers of people who started visiting as part of their local travels during the pandemic.

“Visitors should be prepared to spend more money on gas and set aside an entire day for travel when heading out to the park,” Hanson writes of Glacier National Park. “Upon arriving, visitors to Glacier will have to pay a $35 entry fee.”

SEE THE FULL LIST OF MOST EXPENSIVE NATIONAL PARKS HERE.

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Tackling social isolation could be more effective than healthy eating for obesity

A recent study showed encouraging people with obesity to interact with others more can keep them alive for longer.

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People with obesity are commonly urged to lose weight by eating more healthily, cutting down on calorie intake and exercising more – but that advice overlooks a crucial problem.

It overstates individual agency – putting the person at fault because of poor lifestyle choices – and doesn’t take into account all the factors contributing to the obesity crisis. For instance, research has found that there are significant social determinants of obesity, such as poverty, stigma and loneliness.

A recent study of people in the UK has suggested that one way to keep obese people alive for longer is to encourage them to interact more with other people.

Why exactly might this be?

The study came to its conclusion using something called hazard ratios, a measure of how often a particular event happens in one group compared to how often it happens in another group, over time. It found that people who’re less socially isolated have a reduced hazard ratio of death from any cause (known as all-cause mortality). This means that people who’re more socially connected are less likely to die prematurely from any cause.

This is even more significant in people with obesity. Isolation has a bigger affect on the risk of death in people with obesity than those at a healthy weight. Those with obesity showed a four times greater reduction in mortality risk than people without obesity when their levels of social isolation fell.

We also know obesity leads to a higher risk of social isolation, which in turn has mental and physical health implications. So it’s not surprising that reducing social isolation amongst among people who are obese would reduce the risk of mortality.

However, the degree of change is perhaps unexpected. It means that tackling social isolation could make a bigger difference to those with obesity than other contributing factors. In fact, the study found a reduction in social isolation more associated with decreased risk of death than any other factor, including a healthy diet, physical activity, alcohol consumption, depression and anxiety.

Relationship between social isolation and obesity

Obesity is a medical condition where people have excessive body fat, as measured by their body mass index. Growing rates of obesity means some studies predict around 20% of the global adult population will be obese by 2030.

And the problem is worse in high income countries. Around 25% of adults in the UK are already considered obese, and the rate in the US could become as high as 45% by 2035.

This rise is intertwined with growing levels of social isolation and loneliness. Both increased during the COVID pandemic and and both are linked with a greater risk of mortality, just like obesity.

There is a two-way relationship between obesity and social isolation. In an attempt to escape feelings of isolation, people may consume more food and drink than usual, or eat more unhealthy foods such as chocolate, cake, biscuits – so called comfort foods.

Being isolated and feeling lonely can also lead to a reduction in exercise. Both excessive eating of unhealthy food and a lack of exercise will inevitably lead to weight gain.

On the other hand, obesity can lead to social isolation and loneliness, as people experience stigmatisation, rejection, discrimination, bullying, self-blame and reduced self-esteem. It can also engender a loss of trust in others, and a perception that social situations pose a threat, so are best avoided.

We also know obesity is associated with poorer mental health, especially in women.

Unsurprisingly then, obese people are more likely to isolate themselves, avoid spending time in public places and interacting with others. This can include an avoidance of health care settings, preventing those struggling with weight gain from getting the necessary support.

The most recent study demonstrates the significant damage that social isolation can have on those with obesity. The findings should not be interpreted as a signal that the sole answer to health risks of obesity is making social connections. However, the study should prompt a rethink of attitudes and approaches to obesity that focus exclusively on the individual’s diet and exercise. Research has shown that the traditional “eat less, move more” advice is simplistic and outdated.

Healthy eating and exercise should not be prioritised in obesity treatment at the expense of all other factors. To reduce the mortality risk of obesity, social isolation must be taken into account alongside healthy eating and physical activities. Tackling obesity, then, should include group activities and opportunities for regular social interaction in safe welcoming environments.

Andrea Wigfield does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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