7 Major Companies That Filed for Bankruptcy in 2023 – My MBA Career

Last Updated on December 26, 2023 by Robert C. Hoopes

Title: Challenging Post-Pandemic Economy Forces Prominent US Retailers and Businesses into Bankruptcy

In a stark reflection of the post-pandemic economic landscape, numerous established American retailers and businesses have been forced to file for bankruptcy in 2023. These collapses have been attributed to a range of factors, including soaring costs, supply shortages, and intensified competition.

One of the most notable casualties was WeWork, the renowned coworking-space company, which sought Chapter 11 bankruptcy protection in November after struggling to repay its mounting debts in the wake of the pandemic. The once thriving enterprise faced insurmountable financial obstacles, signaling the immense impact of extended lockdowns and a disrupted work culture.

Rite Aid, a nationwide pharmacy chain, also succumbed to mounting debt and increased competition from heavyweights such as Amazon and Walmart, prompting the company to file for Chapter 11 bankruptcy protection in October. The shift towards online shopping and broader market consolidation proved overwhelming for the traditional pharmacy chain.

In April, Bed Bath & Beyond, the well-known retail outlet where everything could be found, filed for bankruptcy, necessitating the closure of all its 360 stores. However, the brand found a second chance when Overstock.com acquired it and successfully relaunched the online platform as BedBathandBeyond.com.

Another retailer to buckle under financial pressure was Tuesday Morning, a home goods store, which entered Chapter 11 bankruptcy in February due to excessive debts. Ultimately, the company made the difficult decision to close all 200 of its stores in May, unable to weather the storm of economic uncertainty.

Party City, America’s largest party supply retailer, also faced a somber fate in 2023, grappling with rising costs, fierce competition from big-box retailers, and a helium shortage. As a result, the company filed for bankruptcy. However, Party City managed to make a triumphant exit from bankruptcy in September after successfully canceling nearly $1 billion of debt.

Additionally, SmileDirectClub, an orthodontics company utilizing telehealth services, unexpectedly filed for Chapter 11 bankruptcy in December. While its initial aim was to provide affordable dental care, the company’s financial troubles led to its closure within three months, leaving many questioning the viability of telehealth-based models.

Lordstown Motors, an electric vehicle manufacturer, faced a significantly challenging year, culminating in its Chapter 11 bankruptcy filing in June. The company accused its largest shareholder, Foxconn, of fraud and non-compliance with promised investments. Despite acquiring a factory from General Motors in 2019, Lordstown Motors struggled to overcome mounting financial obstacles.

These high-profile bankruptcies serve as stark reminders of the difficulties faced by businesses in the post-pandemic economy. Financial struggles, intensified competition, and disrupted supply chains have proven to be significant hurdles that even established companies have been unable to overcome. As the business landscape continues to evolve, resilience and adaptability remain key to surviving the challenges of the modern era.