‘Retail apocalypse’ saw 57% increase in store closings last year
2024 was not the best year for U.S. businesses, with retailers closing more than 7,300 stores. According to Coresight Research, that’s up 57% from 2023, leading to some media outlets calling it the “retail apocalypse” of 2024.
The recent closures are also the highest number of closed stores since 2020, when the COVID-19 pandemic led many businesses to shutter. According to Coresight Research data, the brick-and-mortar retail sector saw roughly 50 retail bankruptcies in 2024, compared with 25 in 2023.
Last month, The Container Store joined the list of retailers and restaurant chains that declared bankruptcy in 2024, with plans to emerge as a private company after a reorganization.
Though the company flourished during the early days of the pandemic when people were home, analysts say a weak housing market has affected demand.
The news came days after Party City announced it was closing down all of its stores. Big Lots, which filed for bankruptcy protection in September, was set to close up shop as well until a bankruptcy judge approved a last-minute deal to save hundreds of its stores.
Discount chains and pharmacies like Family Dollar, CVS and Walgreens closed hundreds of stores last year, as did restaurants like Red Lobster, Applebee’s and Denny’s.
So, what’s the reason behind the downturn in the retail industry? Analysts point to higher prices and changes in consumer spending. Experts say people are looking for a better deal.
Competition from bigger rivals is also leading to many smaller and specialty retailers with no alternative but to file for bankruptcy and shut down some stores or go out of business completely.
Party City may file second bankruptcy, close more than 700 stores: Report
Party City may file for bankruptcy a second time and close at least 700 stores nationwide, according to multiple reports. The New Jersey-based retailer emerged from bankruptcy, still with more than $800 million in debt that it simply cannot overcome.
Party City was hit hard in recent years by the COVID-19 pandemic lockdowns, supply chain issues and inflation. The company noted a helium shortage hurt its ability to inflate party balloons, impacting business.
Slowing consumer demand and competition from big box stores like Walmart and Target were also factors.
Party City began its business in New Jersey in 1986. Private equity firms acquired the company and took it public in 2015.
In 2023, the retailer filed for bankruptcy, slashed $1 billion in debt and closed about 60 stores across the U.S.
The company hired a financial adviser to help it navigate through the bankruptcy process.
Party City did not comment on the reports of its financial troubles or that major closures are coming.
What do you mean Enron is ‘back’? Parody post confuses the internet
Twenty-three years to the day after filing for bankruptcy, energy company Enron claimed to be “back” in a cryptic X post on Monday, Dec. 2. Enron became infamous for an accounting fraud scandal that cost shareholders tens of billions of dollars and lost thousands of employees their hard-earned pensions.
“In the modern world you must accept change is the only constant,” the post narrated. “We understand this better than anyone and we’re here to lead by example.”
The X post titled, “We’re back. Can we talk?” directs people to Enron.com, a website that claims the company is still an energy company, with the acronym of values: Energy, Nurture, Repentant, Opportunity and Nice.
A press release reads, “In 2024, Enron begins a new chapter, dedicated to solving the world’s energy challenges with innovation, adaptability, and a commitment to a brighter future.”
A parody or a grift?
A closer look at the recruitment page shows the so-called employees are actually stock photos. There’s a company store selling Enron merchandise, like a $118 black hooded sweatshirt.
The fine print on the website’s terms of use and conditions of sale page gives the answer many have been looking for since the company’s resurfacing.
“THE INFORMATION ON THE WEBSITE IS FIRST AMENDMENT PROTECTED PARODY, REPRESENTS PERFORMANCE ART, AND IS FOR ENTERTAINMENT PURPOSES ONLY,” it reads.
The video reached millions Monday morning before Community Notes pointed out the parody language.
It sparked reactions on X like this one: “My grandparents were school teachers who lost $50k of their retirement savings to the Enron collapse. Absolutely thrilled that my children will be able to be scammed by Enron as well.”
Others speculated the company’s resurfacing tied back to a cryptocurrency venture.
The move is reminiscent of two years ago, when RadioShack relaunched as a crypto company, with wild tweets coming from the former electronics store account.
It hasn’t gone so well for them. RadioShack the crypto coin is down more than 99% today, about as relevant as a store selling VHS players.
Rudy Giuliani appears in court, says he can’t pay bills amid defamation judgment
Former New York City Mayor and lawyer Rudy Giuliani appeared in court Tuesday, Nov. 26, telling the judge that he cannot pay his bills after being accused of failing to comply with court orders to turn over his assets. The court action is part of a $148 million defamation judgment against him.
Last month, U.S. District Judge Lewis Liman ruled that Giuliani must turn over several assets to two Georgia election workers, Ruby Freeman and Shaye Moss, who won the defamation lawsuit against him. The assets include his Manhattan apartment, a 1980 Mercedes Benz, some luxury watches and jewelry and cash from two checking accounts.
Freeman and Moss were awarded $150 million in damages last December after Giuliani was found liable for defamation over false claims that they tampered with ballots in the 2020 presidential election.
Liman had previously threatened Giuliani with civil contempt for not complying with the order to surrender the assets to Freeman and Moss.
“The implications you are making against me are wrong,” Giuliani told the judge Tuesday. “I have no car, no credit card, no cash, everything I have is tied up. They have put stop orders on my business accounts, and I can’t pay my bills.”
The former mayor’s lawyer said that his client had already turned over most of the required assets. However, attorneys for Freeman and Moss pointed out that the title to the Mercedes, along with the keys and lease to the penthouse apartment, were still missing.
Giuliani explained that he had applied for a duplicate copy of the Mercedes title, but it was not yet in his possession.
“The implication I’ve been not diligent about it is totally incorrect,” he told the judge. “The implication you make is against me, and every implication against me is wrong.”
In response, the judge warned Giuliani’s defense attorneys that the next time Giuliani interrupted the hearing, “the court will take action.”
After the hearing, Giuliani spoke to reporters outside the courthouse, stating that he does not regret his comments about Freeman and Moss but regrets the “persecution” he believes he is facing.
“The reality is I have no cash,” Giuliani said. “It’s all tied up. So right now, if I wanted to call a taxi cab, I can’t do it. I don’t have a credit card. I don’t have a checking account.”
Giuliani is scheduled to return to court for a trial on Jan. 16 related to the defamation case. The judge will also decide whether Giuliani must surrender his Florida home and four New York Yankees World Series rings.
Giuliani had requested a delay in the trial, citing a planned appearance in Washington, D.C., for President-elect Donald Trump’s inauguration. The judge denied the request.
“Also, the trial he set down for the period of time during President Trump’s inauguration, he really doesn’t need to have it because he’s going to rule against me,” Giuliani said. “If he were sitting in that courtroom and couldn’t figure it out, you’re stupid.”
Spirit Airlines files for bankruptcy after failed merger talks
Spirit Airlines, the biggest discount airliner, filed for Chapter 11 bankruptcy protection Monday, Nov. 18, as it seeks to restructure its debts to bondholders and find ways to sway travelers away from larger airlines. The move comes months after a federal judge blocked a proposed merger between Spirit and fellow budget airliner JetBlue.
Since 2020, Spirit has lost more than $2.5 billion. The airline is also facing debt payments totaling more than $1 billion over the next year.
Spirit said it expects to continue operating business as usual while the bankruptcy process gets underway. This includes guests still being able to book and fly without interruption and team members being paid and given benefits.
In a statement, Spirit said, “The restructuring is expected to reduce Spirit’s debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value.”
In 2022, Frontier Airlines, another budget airliner, tried merging with Spirit but was outbid by JetBlue. The Justice Department sued, arguing the $3.8 billion deal would hurt Spirit customers looking for low fares. In January, a federal judge sided with the DOJ and merger plans were dropped two months later.
Last month, The Wall Street Journal reported Frontier and Spirit revived merger talks only for Frontier to decide against it. This left Spirit with few options.
Spirit already furloughed pilots and unveiled plans to begin selling close to two dozen planes. In addition, Spirit is expected to cut jobs as part of an effort to save tens of millions of dollars. The Florida-based discount airline is supposedly in talks with bondholders to come up with a bankruptcy plan that would be satisfactory for creditors.
Spirit’s bankruptcy filing could happen in the next few weeks, according to the WSJ report. That report also said Spirit representatives had been in talks with management of Frontier Airlines about a possible merger. However, Frontier backed out of negotiations.
Plans to merge with JetBlue in a deal worth almost $4 billion failed earlier this year after the Justice Department went to court to block it. The DOJ claimed such a merger would cause travelers to have fewer choices and pay higher prices. A federal judge agreed and the merger was stopped.
Spirit was once a fast growing, no-frills airline in which customers bought a spot on a flight then paid piecemeal for everything else, such as a seat assignment and checked baggage. However, those surcharges became typical in the airline industry and Spirit is now struggling amidst lots of competition.
Red Lobster’s revival with 35-year-old CEO: Will a millennial makeover work?
Don’t prepare to say your final goodbyes to cheddar bay biscuits just yet. Red Lobster is hoping for a comeback with a millennial makeover led by the company’s new 35-year-old CEO.
Damola Adamolekun has been at the job since August and is now working to bring in younger guests after the chain closed more than 100 of its 640 restaurants earlier this year.
The seafood chain got out of bankruptcy in September when new owner Fortress Investment Group gave $60 million toward reshaping the brand. Adamolekun is already starting to refresh Red Lobster’s atmosphere with new decor and different music playlists.
“You’ll start to see changes first incrementally then over time we expect it to feel like you’re being transported somewhere new,” Adamolekun told NBC News.
The company also unveiled a new menu Monday, Nov. 11, that’s 20% smaller. However, it has nine new items and brought back an old fan favorite: hush puppies. Adamolekun confirmed the restaurant’s “all you can eat” endless shrimp deal is officially gone after the company lost $11 million from promotion alone in 2023.
TGI Friday’s franchisees worried over $50M in gift cards amid bankruptcy
TGI Friday’s recently filed for bankruptcy, blaming the COVID-19 pandemic, its capital structure and a decrease in demand for casual dining for its current status. While the Chapter 11 filing affects only the 39 company-owned restaurants in the U.S., the chain’s franchisees are now worried the bankruptcy proceedings will impact them in the form of nearly $50 million worth of gift cards that are still out there waiting to be used.
Jason Binford, an attorney representing more than 60 franchise locations, argued in a Dallas court hearing Monday, Nov. 4, those restaurants could be on the hook for the millions of dollars in unused gift cards, with some dating back more than 20 years.
“Any comment on this other than — ‘Wow,’” U.S. Bankruptcy Judge Stacey Jernigan said. “$49.7 million on outstanding gift cards. I did a double-take on that. I was imagining, you know, grandparents who got gift cards for their kids in college and then it got thrown away. If it’s going back to 21 years, we have a lot of thrown-away gift cards.”
Usually, the company would reimburse the franchisees for customers using gift cards, but that policy’s feasibility is being questioned amid the 59-year-old restaurant chain’s bankruptcy filing.
The $49.7 million in outstanding gift cards surpasses the $5.9 million the restaurant is borrowing for bankruptcy restructuring, according to court documents.
Binford said the company’s bankruptcy could lead to an uptick in gift card use. He also said a “use it or lose it” mindset for cardholders may make them rush out to spend them.
“We’re certainly supportive of the continued use of gift cards because we agree they drive sales,” Binford told the judge. “It’s just there’s a circumstance where we can be seen, the franchisees, by we I mean, could be seen left holding the bag if there is not a source of funds available to reimburse the franchisees under the ordinary course.”
The judge is allowing TGI Friday’s to continue the gift card program on an interim basis. This gives franchisees more time to review the program and Friday’s finances. Friday’s has 122 franchised locations in the U.S. and 316 more around the world.
Attorneys for TGI Friday’s present at the hearing said the company does plan to honor its obligations for both its franchisees and customers.
How Florida’s state-backed insurance went from last resort to largest provider
It was meant to be the insurance of last resort. But along the way, Florida’s government-backed Citizens Property Insurance Corporation became the largest insurance provider in the state.
“Citizens Property Insurance, which was created decades ago, it is not solvent, and we can’t have millions of people on that, because if a storm hits, it’s going to cause problems for the state,” Florida Gov. Ron DeSantis said in February 2024.
“They are actually very financially secure this year,” Proffesor Charles “Chuck” Nyce, who serves as department chair of Florida State University’s Risk Management and Insurance, said. “I believe what Gov. DeSantis was trying to say is that we don’t want Citizens having this type of exposure and having the need to do assessments.”
Assessments happen when Citizens does not have enough money to pay its claims. First, it applies a surcharge to its own policyholders. But if that is not enough, the state requires Citizens to charge a premium to insurance holders statewide, whether with Citizens or not. Citizens will have to do this for as many years as it takes to plug the deficit.
They were designed to be the market of last resort…For 2021, 2022, 2023, Citizens was becoming the option of first resort.
Chuck Nyce, expert in risk management and insurance
Citizens told Straight Arrow News it “has the financial capability to handle a 1-in-82-year storm without having to levy assessments on non-Citizens policyholders.” For context, Citizens says 1992’s Hurricane Andrew was a 1-in-43-year event.
“Hurricane Andrew is what we kind of describe as a wake-up call,” Nyce said. “It was really the first experience for the insurance industry of what a large-scale catastrophe could look like in the United States. I started graduate school the year after Hurricane Andrew. So my entire academic career has been trying to figure out how to pay for catastrophes that can occur.”
Hurricane Andrew bankrupted several insurance companies, leaving hundreds of thousands in Florida without insurance. Other major insurance providers dramatically mitigated their risk in the state by shifting their focus more inland.
“Now the problem is, for the state of Florida, we have a lot of coastal exposure, so we had to find a way to still insure those properties that were out there,” Nyce said.
If we can solve it in Florida, it’ll be a great lesson to take to other states.
Chuck Nyce, expert in risk management and insurance
Local companies popped up to fill the gaps, while the state created two insurers of last resort that later merged in 2002 to become Citizens Property Insurance Corporation. Nyce said the system worked well until 2004 and 2005, when storms repeatedly hit the Sunshine State, causing tens of billions in losses.
For Florida’s insurance landscape, it was Groundhog Day. Insurance companies dried up and more left the state. But this time, they had a backstop in Citizens, and Citizens’ policies ballooned.
“They were designed to be the market of last resort,” Nyce said. “By 2010, 2011, there were 1.4 million policyholders in Citizens. The good news for the state is from 2005 through 2016 we didn’t have any landfalling storms.”
Citizens successfully shed policies back into the private market until it was down to a little more than 400,000 by 2019. But more storms and litigation costs again broke the private market.
“For 2021, 2022, 2023, Citizens was becoming the option of first resort,” Nyce said. “There was a number of areas where insurance was not available and not available at a fair price. So Citizens became the option.”
Policies swelled back to over 1 million in 2022 and now sit at 1.265 million as of Oct. 4, 2024.
In order to get customers off the state-backed Citizens and back into the private market, a private insurance provider must be willing to underwrite the client at a price that is no more than 20% higher than what they pay at Citizens. At that point, Citizens can “depopulate” that customer.
Depopulation is “trying to push Citizens back to a market of last resort rather than a first choice,” Nyce explained.
“I think it’s more attractive today to offer policies than it was over the last 20 years,” DeSantis said in February. “But, you know, Rome wasn’t built in a day.”
Citizens told SAN that before Hurricanes Helene and Milton, it expected to dip below 1 million policies by the end of 2024. These storms could put that goal in jeopardy.
“When losses get really bad, that’s when the state should come in,” Nyce said. “When they get really, really bad, that’s when the federal government should come in. But for the storms like Helene, that should be private market stuff that’s handling those types of things. But it’s an issue we have.”
Nyce said from an insurance perspective, homeowner policies used to be considered low-risk and relatively stable. But that’s no longer the case in much of the United States, andnd that’s when states see the private market disintegrate.
“If we can solve it in Florida, it’ll be a great lesson to take to other states,” Nyce said.
When it comes to insurance risks, it’s not just hurricanes in Florida and Louisiana. It’s wildfires in California, tornadoes in the Midwest and severe convective storms hitting everywhere in between. Florida may be the tip of the spear for storm exposure, but it does not stand alone.
The Roman Catholic Diocese of Burlington files for bankruptcy protection
The Roman Catholic Diocese of Burlington, Vermont, the state’s only diocese, filed for bankruptcy protection this week amid a surge of lawsuits alleging decades-old sexual abuse by clergy members. The diocese faced a rise in allegations after the Vermont Legislature removed the statute of limitations on childhood sexual abuse claims in 2019.
The filing temporarily paused dozens of unsettled cases, signaling the start of a complex financial restructuring process. Bishop John McDermott initiated the bankruptcy proceedings, citing depleted assets and lack of insurance coverage for incoming settlements.
Since 2006, the diocese settled 67 cases, resulting in $34 million in payouts to victims. An additional $20 million was paid out between 2006 and 2019. More than 30 active cases are still pending resolution.
The diocese took significant measures, including selling church property and tapping into investments, to meet settlement obligations.
There are concerns about the equitable distribution of the diocese’s limited funds among survivors, as large settlements could potentially deplete resources for other claimants.
An independent committee’s 2019 report revealed 40 priests with credible claims of sexual abuse against minors, with most incidents occurring between 1950 and 1980.
