The rosy business prospects of January 2020 gave way to the kind of business devastation that most people have never seen. For business owners, hard times have made for hard choices.
According to The Business Journals, approximately 170,000 small businesses closed in the years between 2008 and 2010, the darkest economic years of the Great Recession. A recent survey from Yelp reveals 163,735 businesses may have permanently closed since the beginning of the pandemic in March, 2020. The numbers and the brief amount of time it took to get from profit to panic are stark.
At the outset of the pandemic, business closure helped stop burgeoning COVID-19 case numbers and relieve strain on hospitals and frontline health workers. Since then openings and closings across the county, patchwork attention to masks, and the now-too-real “second wave” have closed the books on businesses of all sizes. From the neighborhood yoga studio or bodega to national retail chains, business is bad across America for brick and mortar stores.
While online sales have buoyed the fortunes of Amazon and Target, the businesses upon which economies, communities, and families depend have fallen in a slow drumbeat of work-out agreements, Chapter 11, and even liquidated Chapter 7 bankruptcies. Just some of the businesses looking at reorganization—or the end of the road—include:
- Brooks Brothers: The oldest clothing store in the country
- Sur la Table: Upscale kitchen goods retailer
- Crew: Perpetually strong clothing retailer, along with its Madewell brand
- CEC Entertainment: Better known as the company that owned Chuck E. Cheese
- JC Penney: A clothing and house goods retailer that needs no introduction
- Hertz: Car rentals
- Lord & Taylor: The oldest department store in the country is closing all 38 locations
- Neiman Marcus: Luxury clothing and goods
- Pier 1 Imports: Once a go-to for inexpensive home goods and tchotchkes
- Restaurants like Ruby Tuesday, Sizzler, and Friendly’s
For some of these businesses, like JC Penney, the pandemic hastened the road to realization that strong measures were needed. By considering business sales or reorganization through bankruptcy, owners can sometimes salvage assets, restructure debt, shed weight and debt, and come out the other side economically refurbished and ready to return to retail. For others, struggling under mountainous debt, tax liabilities, or just the inevitable, liquidation may be the only route out.
The pandemic is forcing most business owners to reconsider business models and expansion plans in an effort to remain viable in a dramatically different economic environment.
When your balance sheet drops out and strong options are needed to pivot or protect your business assets, speak with an experienced tax attorney for straightforward help assessing your bottom line.
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With offices in Cleveland and Chicago, the tax lawyers at Robert J. Fedor, Esq., LLC respond to your concerns about civil or criminal tax audits, employment tax disputes, or other tax controversies. When you need skilled tax advice, call 800-579-0997 or contact us.