5 Major Retailers That Went Bankrupt in 2023 and What's Next for Them
Some are holding on amid reorganization plans, but others have fully gone out of business.
News of bankruptcy filings is always disconcerting, especially when it's retailers we know and love. In reality, however, the process doesn't mean that your favorite stores are immediately closing up shop and saying goodbye forever. In fact, when companies file for Chapter 11 bankruptcy, it's also known as "reorganization" bankruptcy, allowing businesses to stay alive and pay creditors over time, according to U.S. Courts. Five of the major retailers that went bankrupt in 2023 are either in the process of laying out those future steps, or saying their final farewell. Read on to find out about their next steps.
Rite Aid filed for Chapter 11 bankruptcy in New Jersey on Oct. 15, Best Life previously reported.
The New York Times attributed the filing to lagging sales and billions of dollars in debt. As with other major pharmacies like CVS and Walgreens, Rite Aid also had to contend with over 1,000 lawsuits regarding the alleged illegal fulfillment of opioid painkiller prescriptions.
However, the drugstore chain also announced in October that it had secured $3.45 billion in "new financing to support business operations," which includes the resolution of litigation claims, the selling of its prescription benefit provider Elixir Solutions, and restructuring its store footprint, among other initiatives.
Rite Aid has been actively shrinking its store footprint, initially publishing a list of over 150 store closures across 15 states. Moving forward, expect to see even more stores shutting down, as 19 more are set to close, per a Dec. 19 announcement.
Bed Bath & Beyond
Bed Bath & Beyond filed for Chapter 11 bankruptcy in April and subsequently closed the last of its brick-and-mortar locations, which included 120 buybuy Baby stores and 360 Bed Bath & Beyond stores.
But while the original Bed Bath & Beyond may be no more, several companies competed for the rights to take over what the retailer left behind—and in June, court filings confirmed that Overstock.com had won the rights to acquire Bed Bath & Beyond's assets, including the famous name.
"Following completion of the court-approved auction process and in consultation with the official committee of unsecured creditors, Bed Bath & Beyond Inc. has selected a proposal from Overstock.com as the winning bidder," Julie Strider, a Bed Bath & Beyond spokeswoman, told The New York Times in a statement.
Moving forward, shoppers will still see Bed Bath & Beyond's name, as well as one of its most popular incentives: The 20-percent-off "Big Blue" coupon is back once again thanks to Overstock.com, CNN reported.
Party City, a household name for party supplies, filed for bankruptcy in January, with plans to restructure its debt and stay afloat. According to CNN, the driving factors for the filing included increased competition from big-box retailers, higher costs during the COVID-19 pandemic, and a helium shortage.
At the time of the filing, there were over 770 company-owned stores and 53 franchised stores. Party City announced it would be closing locations that didn't "meet the key financial metrics required for our go-forward fleet."
In a happy twist of fate, however, the party supply chain exited bankruptcy in September when a judge approved reorganization plans to cut almost $1 billion of the retailer's debt, CNN reported. Even better, while some stores are still closing due to the bankruptcy agreement, a majority of Party City's locations will stay open as a result of the new plan.
On Sept. 29, telehealth orthodontics company SmileDirectClub filed for Chapter 11 bankruptcy. Any hope that may have provided was short-lived, as the company confirmed it was ending operations for good earlier this month.
"SmileDirectClub has made the incredibly difficult decision to wind down its global operations, effective immediately," the company said in a statement on its website. "For new customers interested in SmileDirectClub services, thank you for your interest, but aligner treatment is no longer available through our telehealth platform. For existing customers, we apologize for the inconvenience, but customer care support is no longer available. Thank you for your support and letting us improve over 2 million smiles and lives."
The company sold teeth aligners, with the process taking about four to six months to complete, CNN reported. Existing customers were informed that they would no longer be receiving 60-day check-ins for aligner treatment, with the company referring patients to their doctor or local dentist.
Popular off-price retailer Tuesday Morning filed for bankruptcy in February—and unfortunately is one of the stores that went out of business for good just a couple of months later.
The bankruptcy filing was the second for the company in the past three years, but the final round was fueled by "exceedingly burdensome debt," Tuesday Morning executives said in a press release.
On April 27, Texas-based Tuesday Morning Corp. was sold to Hilco Merchant Resources for $32 million. There were hopes that the roughly 200 remaining stores could stay open, but Hilco confirmed it was overseeing the liquidation of all remaining locations, The Dallas Morning News reported.