J.Crew filed for bankruptcy — and shoppers on Twitter have thoughts. Getty Images

THE NEUTRAL ZONE

J. Crew became the first national U.S. retailer to fall due to coronavirus pressure and economic shutdowns. The retailer filed for bankruptcy protections Monday, and it is estimated that other stores may follow suit. Already financially-burdened stores like JCPenney and Neiman Marcus were forced to close many of their stores, even with unemployment at an all-time high. 

While gaming and video streaming saw a spike when coronavirus began forcing Americans to stay at home, other industries, like retail, took a hit. For years, traffic has decreased at big box stores as consumers turn to online shopping and the pandemic only exacerbated this issue. In late March, retail leaders asked for emergency aid– though of the $2 trillion federal stimulus package, little flowed to large department stores

As economies begin reopening among states, J. Crew plans to open its retail stores once lockdowns are lifted and continue online sales. On Monday, Macy’s opened up 68 of its more than 700 retail stores to the public. As stores continue to open, a record number of Americans have also filed for jobless benefits, meaning unemployment will likely remain elevated and cut into shopping abilities.

MEDIA PERSPECTIVE

How has coronavirus changed consumer spending? – World Economic Forum – 5/2/2020
Generally, spending is down across all industries, as lockdown measures have restricted what we can spend money on, due to restaurants and shops being shut and air travel suspended.

Life after lockdowns – The Economist – 4/30/2020
90% is just fine; in an economy it is miserable, and China shows why. The country started to end its lockdown in February. Factories are busy and the streets are no longer empty. The result is the 90% economy. It is better than a severe lockdown, but it is far from normal.

When Will The Unemployed Go Back To Work? Many Laid Off Workers Expect To Get Jobs Back In The Short-Term But Experts Caution About Long-Term Unemployment – Kaiser Family Foundation – 5/4/2020
The CBO report projects the U.S. labor market will improve after the third quarter, largely driven by a decrease in social distancing restrictions and businesses opening up, but the unemployment rate is expected to stay above 10 percent throughout 2021. This means many of those workers who have been laid off or lost jobs due to the coronavirus outbreak may not be going back to work this year.

How J. Crew’s bankruptcy sets the stage for a ‘shakeout’ in retailRetail Dive – 5/5/2020 J. Crew belongs to a group of retailers that were already on the edge. It had unsustainable debt, instability in the C-suite, tens of millions of dollars in losses, and sales declines in its namesake banner so deep that some years it dragged down sales for the entire company. 

INFLUENCER PERSPECTIVE

Steven Rattner on Twitter, 4/30/2020: JC Penney, Neiman Marcus, Hertz and now J Crew among the many co’s headed into bankruptcy. Lots more to come. Recovery going to be long and tough.

John Cassidy on Twitter, 4/30/2020: Don’t forget J Crew got loaded with debt years ago in a private equity deal, so this isn’t just a Covid story.

Hassan Sayyed on Twitter, 5/4/2020: So J.Crew is really going to sit here and act like their Chapter 11 filing is due to Covid-19, and not the fact that they’ve been flailing year over year for at least four years? Oh okay.

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