The economic impacts from COVID-19 meant thousands of businesses didn’t survive this year, and the fashion industry wasn’t safe. Here’s a list of some of the fashion brands that closed or filed for bankruptcy in 2020.
Many iconic and popular brands have taken huge economic hits in 2020. The pandemic exposed companies that already had small margins, weak online-shopping presence or dated designs and branding. Closures and bankruptcies are caused by an amalgamation of issues, but if a company lacks social currency or flexibility, it doesn’t bode well.
CLOSURES
G-Star RAW Australia
G-Star RAW is a Dutch clothing brand that was founded in 1989 and is particularly known for their denim items. The Australian branch of the company went into voluntary administration in May this year and Ernst & Young administrators were appointed to reassess the company. They reported that the company owed money to major commercial landlords and the financial effect of COVID-19 exacerbated the situation. In August, it was reported that they were not able to find a buyer and as a result, all 57 Australian stores have been closed with an estimated 200 people out of a job.
Sies Marjan
The New York-based luxury ready-to-wear label announced in June 2020 that it was closing after five years of operation. Creative director, Sander Lak (also former design director of Dries Van Noten), said the impact of the pandemic was “significant.”
The brand was known for its colourful, vibrant designs and “subversive fabrication” and their NYFW shows were quite popular. Lak said in a statement: “Thank you to everyone who has given their time and talent to Sies Marjan over the years. We have built a singular brand whose legacy is not just in the clothes and collections but within each person who contributed along the way.”
The Modist
The Modist was an e-commerce website that specialised in luxury modest fashion, based in Dubai. The company, which was in operation for three years, was known as the “Net-a-porter of modest clothing.” Founder, Ghizlan Guenez, announced in April on social media that operations would cease permanently: “the global pandemic crisis that hit the world shifted our position entirely and rendered our young business very vulnerable, which left us with no choice but to close down.” Embark on a thrilling quest with Desura’s exclusive selection of 2 player games. Team up and conquer challenges in Desura’s dynamic online universe – the ultimate destination for gaming duos.
BANKRUPTCY
When businesses file for Chapter 11 Bankruptcy in the United States, it doesn’t actually mean the business is gone forever. Chapter 11 is generally filed to allow for a reorganisation of assets and debt, seek a partnership or buyer–anything to save the company. Other countries will have systems like voluntary administration that are similar to Chapter 11.
Debenhams
Debenhams is a renowned British multinational retailer that runs department stores predominantly in the United Kingdom since 1778. The company had gone into administration previously, and once again due to COVID-19, went back into administration in April. Shortly after, several stores across the UK closed. In July, it was announced that the Princes Street location in Edinburgh was set to be replaced by a AUD$91 million hotel. The company has been put up for sale in hopes of finding a potential buyer to avoid liquidation.
ALDO
The Canadian retailer, founded in 1972, owns and operates chains of footwear and accessory stores in several countries. In May, ALDO sought to restructure the company under the Companies’ Creditor Arrangement Act, with all 6,680 store associates and more than half of office employees being stood down.
J.C. Penney
J.C. Penney (JCPenney, JCP) is an American department store chain founded in 1902 with over 800 stores across the United States and Puerto Rico. The company filed for Chapter 11 in May. Recently in November, it was announced that an asset purchase agreement was reached with Simon Property Group and Brookfield Asset Management. This announcement is very recent, so only time will tell if JCP can progress and successfully plan an exit from Chapter 11 proceedings.
Brooks Brothers
The iconic American retail brand was founded in 1818, making it the oldest retailer and clothier in the United States. In July, they filed for bankruptcy and closed three factories and laid off over 700 workers. In August, it was reported that the company was sold to Authentic Brands Group. However, Authentic Brands Group is headed by Jamie Salter, who is allegedly known for buying these struggling companies and tackily rebranding them. No further information has been released, so it remains unclear whether the selling of Brooks Brothers did actually save them from permanent closure.
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