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It's been a tough year for some big-name U.S. retailers and companies. As the economy emerged from the Covid-19 pandemic, businesses faced a host of problems stemming from high costs, supply shortages and growing competition.
As a result, several big names filed for bankruptcy in 2023.
Of course, bankruptcy does not necessarily mean that a company will go bankrupt. Many companies in the United States file for bankruptcy to wind down some operations, reduce debt, and save costs. A common route is Chapter 11 bankruptcy, which allows the company to resolve its financial problems through restructuring.
WeWork has had a wild run in 2023. Once the most valuable startup in the country, the company appeared poised to reshape the nature of work in America. Some compare its meteoric rise and chaotic, high-profile fall to the Fyre Festival and FTX fiascos.
The troubled coworking space company filed for Chapter 11 bankruptcy in November. It wasn't a big surprise. The month before, WeWork said it was struggling to repay its debts after the pandemic rocked its core business as more people worked from home.
However, the decline of the former tech unicorn began long before Covid-19. A botched IPO in 2019 doomed the company and exposed unexpectedly large losses and potential conflicts of interest with the company's co-founder and then-CEO Adam Neumann. Neumann's unorthodox leadership style was the subject of extensive reporting (along with a Hulu documentary) and he was ousted in 2019.
WeWork said it would remain open and operational while renegotiating its leases and debt obligations.
After a long string of problems for drugstores, Rite Aid filed for Chapter 11 bankruptcy in October.
Like CVS and Walgreens, Rite Aid has had to settle costly lawsuits stemming from allegations that it wrote illegal opioid prescriptions to customers. But unlike its competitors, Rite Aid lost its battle against mounting debt and was unable to recover financially.
Rite Aid has also struggled to compete with Amazon, Walmart, Target and Costco, which are more customer-friendly alternatives to national pharmacy chains.
In an SEC filing in October, the company said it expected a significant increase in losses – on top of the three-quarters of a billion dollars it lost between March 2022 and March 2023 – and another $307 million between March and May of this year .
The company said in a statement it had secured $3.5 billion in financing and debt reduction arrangements from lenders to keep the company afloat during bankruptcy. The company said it would accelerate the pace of its store closures and sell some of its businesses, including prescription services provider Elixir Solutions; and also appointed a new CEO.
Rite Aid specifically cited an increase in thefts as it closed some of its stores.
Bed bathroom beyond that
After a long journey that finally failed this year, the everything-everything store filed for bankruptcy in April. The last 360 stores and 120 Buybuy BABYs were closed in one of the largest retail bankruptcies in years.
Brian Snyder/Portal
Shoppers leave a Bed Bath & Beyond store in Danvers, Massachusetts, on April 24, 2023, after the company filed for bankruptcy.
But you will still see the famous blue logo. Overstock.com bought the brand out of bankruptcy and relaunched its own website as BedBathandBeyond.com. This move aligned Overstock's online business model and merchandise categories with popular branded products preferred by Bed Bath & Beyond shoppers.
Bed Bath & Beyond's iconic Big Blue coupon for 20% off a single item has been revived, but can only be used online.
The company had long been shrinking to save money. In early 2023, the company announced it would close around 400 locations but keep profitable stores open in key markets. It also attempted to save money by not paying severance pay to some laid-off workers when stores closed.
Another home goods store that failed in 2023 was Tuesday Morning, which filed for Chapter 11 bankruptcy in February because of its “excessive debt.” It was the second bankruptcy in three years.
In May, the company announced it was going out of business and closing all 200 stores.
The first bankruptcy occurred in May 2020, at the height of the pandemic, due to extended store closures that posed an “insurmountable financial hurdle.” Three years ago there were already 700 locations.
The party appeared to be over for the party supply store when it filed for bankruptcy in January 2023, weighed down by competition and years of financial losses. A regulatory filing said it had reached an agreement with creditors to reduce its debt burden by $1.7 billion.
America's largest party supplier filed for bankruptcy in 2023, suffering from competition from major retailers, rising costs during the pandemic – and a helium shortage.
Joe Raedle/Getty Images
People shop at a Party City store in Miami, Florida on January 18, 2023.
However, the company emerged from bankruptcy in September after a U.S. judge approved the retailer's restructuring plans.
The plan forgives Party City nearly $1 billion of its debt, while nearly canceling some of Party City's debt 800 US stores will close as a result of the bankruptcy agreement, the majority will remain open, according to the company.
The telemedicine orthodontics company closed in December, less than three months after it filed for Chapter 11 bankruptcy.
The company sold dental aligners, the typical course of which lasted 4 to 6 months. The company encouraged customers who were stuck in the middle of their treatment to contact local dental practices.
SmileDirectClub, founded in 2014, once promoted itself as an affordable alternative to traditional offerings Orthodontics with a mission to “democratize access to a smile everyone loves by making it affordable and convenient for everyone.”
In a statement, the company said the restructuring would “allow SmileDirectClub to thrive as an international leader in oral care for many years to come” and emphasized its intention to “continue to provide affordable and accessible oral care to its customers without interruption.”
The electric vehicle maker filed for Chapter 11 bankruptcy protection in June and put itself up for sale.
The company also announced a lawsuit against Foxconn, accusing its largest shareholder and former partner of wanting to “destroy” the company.
Dustin Franz/Bloomberg/Getty Images
Lordstown Motors headquarters in Lordstown, Ohio.
In a statement, the company said it had no choice after a high-profile collaboration with Foxconn, one of the world's largest electronics makers, collapsed. It accused Foxconn of fraud and failing to fulfill its promises to invest in the company.
Lordstown, which took its name from its industrial base in Ohio, was the lifeblood of the local economy – the company bought its factory from GM in 2019 to produce small cars for America's leading automaker. Initially there were 1,600 employees, but at the end of 2022 there were only 260 full-time employees. In 2021, just a few years after founding, the company warned that it could go out of business.
— CNN's Catherine Thorbecke, Eva Rothenberg, David Goldman, Nathaniel Meyersohn, Jordan Valinsky, Samantha Delouya and Michelle Toh contributed to this report.