Financial Focus: The coronavirus has bankrupted some of our 20th Century economy’s icons

By Professor Anthony Rivieccio MBA PFA

Well, pretty soon, I’ll be making a choice on Social Security. Yes, I’m getting old. I will be 60 soon and I’m okay with it. I have an adopted sibling who calls me, “Uncle Tony.” Sometimes I walk around lmy eementary school (I am also a teacher) and I’ll hear whisperings of “grandpa.”

Yes, I have many good memories. The things, the people my age can remember. Some of our fondiest memories,  I am sure are the ’80s and ’90s — the latter parts of the 20th Century.

Hertz , you might remember its under the brands, Dollar, Thrifty and Firefly, was a place where one can rent a car. I remember in the 1980s and 1990s, thinking I was a ” bad dude” then, renting from one of their Manhattan stores during my “go-go” Wall Street days.

JCrew, was a fashion statement and you would look for their shirts while you were shopping. depending on what money was left , you might sneak into JC Penney to see what kind of shoes or sneakers they had. Yep, memories. As a Bronxite back then, all you had to do was spend ( at that time) a wonderful day on Fordham Road.

I say that because of many other reasons, coronavirus has now put the final nail in the local retail coffin. They are, for the time being,  gone, bankrupt!

Now since they filed Chapter 11 (instead of Chapter 7) that bankruptcy option allows them to come back — in some fashion —  if their debt is restructured.

Can Hertz come back? The company has been around since 1918. Recent records show that “Management” was just paid $16 million in bonuses. Many do not think so.

Can JCrew come back? JCrew, through its private equity partners, has grown rapidly since 2011. But so has its debt, from $50 million to $2 billion dollars. They do own over 500 stores and they have made announcements about planned restructuring.

JCPenney might be the heartbreaker for me. It has been around for 118 years. It has 846 stores but management has just announced the closing of 200. Its current net losses are $4.5 billion and management as well wants to restructure.  My best cheap but semi- quality ” comfy” shoes came from there .

Today , Big-box discounters like Walmart , Target  and Costco have proved to be big time competition, offering shoppers lower prices and a selection of items not found in department stores.

Couple this with the new ” online shopping” version of our economy and many can go see these companies either shrinking or go by the history of our 21st Century, now Coronavirus stay at home economy. 

But alas, I was born and bred in the 20th century. I see parts of my childhood vanishings daily and it causes heartbreak. Yes, our economy will get better, but these were, for many decades, “must -visit” stores, goods and services. 

Is the coronavirus totally to blame? Not really. But, it will in my opinion, start to show that our new stay-at-home economy is here to stay. 

Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr.  Rivieccio is an Adjunct Professor of Business, Finance & Accounting at the City University of New York and Monroe College. You can reach Anthony at 347.575.5045.

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