Industries with the most bankruptcy filings in 2020 revealed

The report sheds light on the industries with the most bankruptcy filings

bankruptcy

Industries with the most bankruptcy filings in 2020 revealed. Source: pixabay.com

GlobalData has found that the industries with the most bankruptcy filings are retail (32%), oil and gas (30%), foodservice (7%), and travel and tourism (7%).

The report states that retail and foodservice companies faced insolvencies due to their inability to swiftly go digital.

In the foodservice sector, NPC International, Pizza Hut, and Wendy’s franchisee filed for bankruptcy due to its piling debt.

Giants like McDonald’s, Starbucks, and Burger King were able to adapt to changing consumer trends. However, the same cannot be said for smaller restaurant chains, which saw a decline in sales.

As to oil and gas companies, they faced a drop in consumer demand. A steep downfall in oil demand caused prices to reach lows, with companies including Whiting Petroleum Corp and Chesapeake Energy filing for bankruptcy.

For retail chains that were unable to switch to digital sales, the situation worsened due to the shuttering of physical stores and eventually drove a collapse. J.C. Penney’s piling debt and ultralow foot traffic due to prolonged social distancing and quarantine orders forced it to file for bankruptcy in May 2020
Rinaldo Pereira, Senior Analyst at GlobalData

In the travel and tourism sector, LATAM Airlines filed for Chapter 11 bankruptcy protection in the US in May. In July, the company was able to secure an additional $1.3 billion in funding from Oaktree Capital Management and combined with a $900 million convertible loan from other major shareholders.

We’ve reported that nearly 500 US companies filed for bankruptcy since March 2020 and the trend is expected to persist in the near future.

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