The year 2024 witnessed a raft of US corporate bankruptcies as numerous top companies finally buckled under financial pressure. Of course, all major chronic inflation, shifting consumer trends, and ruthless competition were factors leading to such bankruptcies. At a one-month tally, at least 19 companies have cut about 14,000 jobs as a result of bankruptcies, according to Challenger, Gray & Christmas, a firm that tracks outplacement services.
Top businesses that filed bankruptcy in 2024
Here are the top businesses in different sectors that filed for bankruptcy:
Retail sector
A Wave of store closures in the retail business increased astronomically, with at least 7,100 closures as of the end of November, a 69% spike compared to the same period last year, according to research firm CoreSight.
Big Lots: Big Lots announced a bankruptcy filing in September while revealing plans to close 295 locations. Another spate of 250 store closures could be in the works. Not unexpectedly, the discount retailer came into this bind from high inflation combined with spiking interest rates and a shift in consumers’ behavior, which served to reduce sales while raising debt.
Anyway, recent developments appear to turn the process of going out of business in reverse: Big Lots has reached a deal with Gordon Brothers Retail Partners, LLC, for the sale of its assets to other retailers. Variety Wholesalers, Inc. is going to acquire approximately 200-400 Big Lots stores and two distribution centers to keep the Big Lots company running and possibly maintain its current employees. Such a strategic sale and transfer would be of great help for Big Lots with job retention as well as brand retention.
Party City: The party supplies retailer, which had emerged from bankruptcy earlier in 2023, filed again this December 2024. As part of the wind-down process, Party City is winding down all its stores in the United States by Feb. 28, 2025. “Inflationary pressures on merchandise costs and decreased consumer spending, in addition to roughly $800 million in debt, really created a perfect storm,” CEO Barry Litwin said.
The Container Store: The Container Store filed Chapter 11 bankruptcy in December to restructure over $240 million of debt. Despite reporting a 10.5% drop in revenue annually and a 12.5% drop in-store sales, CEO Satish Malhotra had one message for customers: “We are here to stay.” It will keep all of its employees and continue operating all stores while it goes through restructuring.
Restaurant Industry
Casual Dining Chains: Casual dining has been most hurt by a spate of bankruptcies declared amongst several legacy chains as consumer taste and economic pressure turned against them.
Red Lobster: After years of underinvesting in marketing, food quality, and service, Red Lobster chain filed bankruptcy in May. It closed upwards of 100 locations but emerged from bankruptcy in September under new ownership and leadership that has since begun to implement changes to the menu in hopes of revitalizing the brand.
TGI Fridays: TGI Fridays, Known for being a chain restaurant for casual dining, the chain filed Chapter 11 bankruptcy in November. The company cited the COVID-19 pandemic fallout, adding it will use the bankruptcy process to explore strategic alternatives concerning the brand’s long-term viability.
Aviation Sector:
Spirit Airlines: The ultra-low-cost carrier had filed for bankruptcy last November, following its surging losses, unaffordable debt, rising competition, and failing to merge with its sister airlines.
Spirit Airlines is currently negotiating with current creditors to slice its debt burden and ultimately improve its financial flexibility so that it can exit bankruptcy protection early next year.
Consumer Goods
Tupperware: Tupperware, the iconic kitchen brand, after falling in popularity for years, declared bankruptcy this September. Its brand name and intellectual property was taken over by a private equity firm in the later part of November with plans of retaining the company.
Economic impact
This boom in corporate bankruptcies captures the longer-term economy’s residual inflation. Private equity investors have factored into 65% of billion-dollar bankruptcies this year, a reflection of deep involvement in the financial restructuring of major corporations.
In all, 346 corporate bankruptcy filings have been made so far in 2024, the most of any comparative period in the last 13 years.
