NOVI (WXYZ) — Big name retailers are taking a big hit amid the coronavirus pandemic. Neiman Marcus is nearing bankruptcy, J-Crew filed Monday and now the latest to reportedly file for bankruptcy is Lord & Taylor.
Experts expect more stores to file for bankruptcy, saying the future of the retail industry up in the air. Businesses will also need to make plans for the future if they expect to survive, experts add.
"This is the thing that puts them over the edge so yeah, this is just the early phase of it," said Doug Bernstein, business law director at Plunkett Cooney.
The future of the retail industry is in uncharted waters as another retailer, Lord & Taylor is reportedly preparing to liquidate its inventory at all 38 stores.
"If you’re doing a liquidation sale, the creditors get as much as they can out of the inventory and they’re not typically going to become whole, they’re going to suffer a loss as well," Bernstein said.
Lord & Taylor is the latest reportedly to file for bankruptcy amid the coronavirus pandemic. Neiman Marcus is near to filing and J Crew filed for bankruptcy on Monday. Smaller businesses will feel the ripple effect.
"They’ve been closed since March, so they haven’t been bringing in any revenue," said Meegan Holland with the Michigan Retailers Association. "Yes, there have been some programs to help them out but nothing replaces customers walking through your doors."
Experts say people are now more inclined to shop online, but will need to change that if the retail industry will survive..
"We need now to retrain them and go back into local stores or order curbside delivery or do online shopping from a Michigan store," Holland said.
With many retailers hit hard financially by the COVID-19 outbreak, the future of the retail industry both big and small and people shopping again in crowds is up in the air.
"The business model will change because obviously people are not as likely to go into malls, so we’re going to see more online sales and less mall traffic," Bernstein said
He added that he expects more stores to follow suit and file for bankruptcy in the near future.