Victims of The Great Recession
The Great Recession has been the Grim Reaper for a lot of businesses in the United States some of them at the peak of their life spans, large billion dollar operations others community staples. Here is a tale of the Great Recession told through pictures in the order of collapse.
The first victim ceased operations before the latest recession technically began, but it helped contribute to the unemployment picture in Michigan where it had many locations and distribution facilities.
Farmer Jack was liquidated by its parent company The Great Atlantic & Pacific Tea Company, Inc also known simply as A&P. Farmer Jack completely ceased operations on July 7, 2007. Some stores were later purchased by and rebranded as Kroger’s. Perhaps unsurprisingly A&P stores announced December 12, 2010 that the chain is filing Chapter 11 bankruptcy protection.
La Shish was a prominent Mediterranean restaurant in South East Michigan. The store had 11 locations, and 305 employees when it shut down in late February 2008. The economy wasn’t to blame for this failure, it had a mix of poor management, tax evasion, alleged terrorist ties, and FBI raids. A more detailed summary of events can be seen here and here.
Mervyns went bankrupt and in October 17, 2008 and liquidated all locations. Some locations were bought up and rebranded as Kohls, and Forever 21.
The Value City chain had bought the scraps of another defunct retail chain Crowley’s in 2004. The purchase didn’t help Value City and it died completely on December 23, 2008.
The Linens ‘n Things company was liquidated and all stores closed on December 28, 2008.
The Sharper Image closed all of its retail locations by the end of 2008 citing poor sales. About 2,500 employees were affected. The company’s assets were later sold to a group of investors.
Once a popular store for getting cheap affordable clothing that was often university themed. Steve and Barry’s was liquidated in Chapter 11 bankruptcy and officially died off on January 30, 2009.
KB Toys was liquidated and most stores ended in December 2008. Toys R Us bought the name and website.
Circuit City ended it’s brick and mortar stores completely on March 8, 2009. There were about 30,000 employees that lost their jobs in this Chapter 7 bankruptcy liquidation. An Ex-Best Buy executive Don Eames recently released an ebook on the subject of the Circuit City failure titled CIRCUIT CITY SIX Six Fatal Mistakes of a Once “Good to Great” Company his ebook can be be found at his website here.
Inkstop filed for Chapter 7 bankruptcy November 7, 2009 and was liquidated. It had abruptly closed all 152 stores in October of 2009 and didn’t pay employees for work performed. They eventually settled with 629 employees for $660,000 in back pay. Four of the companies executives were indicted for fraud related charges.
Steak and Ale was liquidated as part of a Chapter 7 Bankruptcy by owner S&A Restaurant Corp on July 29, 2008.
Bennigan’s Grill and Tavern was owned and operated by the same holding company that owned Steak and Ale and all corporate stores where liquidated on July 29, 2008. Only franchised locations of Bennigan’s exist today.
Movie Gallery bought Hollywood Video, and later entered Chapter 7 bankruptcy which resulted in liquidation in 2010.
TJX Cos the owner of stores such as T.J. Maxx and AJ Wright will be closing the AJ Wright brand and eliminating 4400 jobs. 71 stores will be completely closed, and 91 will reopen under different brand names like T.J. Maxx.
Ultimate Electronics a business that is no stranger to bankruptcy filings in 2005 it filed for bankruptcy protection. January 24, 2011 the company again filed for bankruptcy protection but was unable to secure financing. February 10, 2011 the company announced that it would liquidate with all stores closing by April 15, 2011. The liquidation will affect about 1,500 workers who will lose their jobs.
Ultimate Electronics also shares an ironic connection to the now dead Hollywood Video as the founder of that company had purchased Ultimate Electronics through bankruptcy in 2005.
Ravaged by Hurracane Ike in 2008, Foreign Corrupt Practices Act Investigations, and an offshore drilling moratorium Seahawk Drilling is the latest victim of the Grim Reaper.
Seahawk Drilling Announced February 11, 2011 that it will file bankruptcy and sell off all of its assets to Hercules Offshore Inc. The company’s last annual report declared 600 employees in 2010. The Associated Press is reporting final numbers to be 494 and while they say their fate is unknown it is fair to assume the majority will lose their jobs.
Nomads a luxury travel group based out of Metro Detroit Airport filed Chapter 7 bankruptcy on February 28, 2011 and will liquidate its assets. The group cited a rough travel climate from members who are typically retirees.
Borders Group the parent company of the Borders book stores and Waldenbooks has confirmed that they have delayed payments to vendors to avoid a liquidity crises. A sure sign that a bankruptcy filing is very possible in the near future.
Employee Count as of January 30, 2010:
8,500 full-time employees
12,100 part-time employees worldwide
Since we’ve published this article Borders has taken actions to lay off over 300 workers and has hired a bankruptcy firm, all signs that point to a company on the brink.
Borders Group officially entered Bankruptcy on February 26, 2011, it declared that it would close at least 30% of its outstanding locations. In just over one year from its last employee count number the number of employees are now:
July 14, 2011 the bankruptcy court determined that Borders would be liquidated. Since the beginning of the bankruptcy you can see that over 17,000 part-time and full time jobs will be lost as result of this ruling.
On the brink of collapse. Companies to watch in 2011.
The retailers that are on the brink of total failure are not currently destined for liquidation. Although many of the above examples of failures did start as Chapter 11 bankruptcy filings and simply couldn’t get funding or restructure debt obligations and were forced to liquidate through Chapter 7 bankruptcy.
On September 23, 2010 Blockbuster video filed for Chapter 11 bankruptcy protection and carried more than $900 million in debt. We outlined some of the reasons that Blockbuster is getting beat up and exactly why The Bankruptcy of Blockbuster is a Big Deal. If the chain is ultimately liquidated it will result in a loss of over 32,000 jobs in the U.S. economy and result in a total loss of 48,000 globally.
Recently Blockbuster Video is asking for an additional $200-250 million to protect its operations. Signs that Blockbuster will continue to make cuts, or worse yet liquidate through Chapter 7.
February 10, 2011 showed a turn of events for Blockbuster the company is reportedly putting itself up for sale because of disagreements with creditors to get financing to exit bankruptcy. This is a do or die moment for Blockbuster, if no buyer steps up we can expect a bankruptcy filing.
Loehmann’s Entered into Chapter 11 bankruptcy and closed 8 stores November 15, 2010.
The Great Atlantic & Pacific Tea Company, Inc also known simply as A&P stores filed for Chapter 11 bankruptcy protection on December 12, 2010. On the day it filed for bankruptcy protection it had 395 stores under its management, and as of September 2010 A&P had 43,729 employees, of which approximately 68% are employed on a part-time basis.
American Apparel on April 1st announced it may be forced to enter Chapter 11 bankruptcy, it also stated that if it can’t get a proper turnaround plan approved or get financing it may need to liquidate. Liquidation seems like a realistic outcome considering the company has extensive debt, and multiple lawsuits against its founder for sexual harassment. American Apparels core market of young adults shares one of the highest unemployment rates which would put a damper on customer spending.
If the company liquidates it would be a major blow to California unemployment:
April 4, 2011 the Sbarro chain filed for Chapter 11 bankruptcy protection blaming the Great Recession keeping customers at home. The pizza chain has about 8,000 employees in 40 countries and 200 stores in the United States.
June 13, 2011 Perkins & Marie Callender’s files for Chapter 11 Bankruptcy. The company will close 65 locations and eliminate 2,500 jobs. It had about 600 locations previously.
Certainly there are other examples feel free to let us know what we missed, or if you even miss these corporate relics. Leave a comment below it only takes a few seconds.
Even better, if you happen to be an ex-employee of one of these companies and wish to share your story email us at [email protected]