If the pandemic is not controlled, it will increase the number of bankruptcy cases
According to GlobalData, nearly 500 US companies filed for bankruptcy since March 2020 and the trend is expected to persist in the near future.
Since businesses are shutting down, consequently job growth is showing a slowdown as well. On top of a stoppage of unemployment benefits, consumer spending is bound to be heavily impacted in the months to follow, the analyst said.
Largest companies that went bankrupt in the US:
- Foresight Energy LP filed for Chapter11 bankruptcy on March 10.
- Frontier Communications Corporation filed for Chapter 11 bankruptcy on April 14.
- JC Penny filed for Chapter 11 bankruptcy on May 15, stating it would close 30% of its store base.
- 24 Hour Fitness filed for Chapter 11 bankruptcy on June 14, stating it would permanently close down more than 130 gyms.
- WorldStrides filed for Chapter 11 bankruptcy on July 20.
The US Government’s stimulus measures may be helpful, according to information. However, it might not be enough to prevent further bankruptcy filings in the coming months.
We’ve reported that the American oldest apparel brand Brooks Brothers filed from bankruptcy after the pandemic hit its sales and disrupted the effort to fulfill business strategy changes.