Empire State Review Team 
Overview of Major Retail Bankruptcies and Chapter 11 Filings
In the evolving landscape of American retail, the filing for Chapter 11 bankruptcy does not often signify the definitive end of a business. Rather, it can pave the way for restructuring and a potential resurgence. Several well-known retail chains in the U.S. have recently navigated this complex process, shedding light on its implications for the industry.
Recent Developments in Chapter 11 Bankruptcy
Several large retail companies, including Big Lots, Party City, Joann, and Macy’s, have recently entered the bankruptcy arena, marking a significant shift in the retail sector. As they undergo liquidation and restructuring, these companies have been attracting significant consumer attention.
Big Lots
Following its Chapter 11 filing in September 2024, Big Lots announced plans to close all of its remaining stores. Nevertheless, a deal reached by Variety Wholesalers in December 2024 has breathed new life into the company by retaining around 200 locations under the Big Lots name. Currently, these stores are offering significant discounts of 50-80% to clear out inventory, even as signs of a store closure persist.
Despite the acquisition, the fate of Big Lots employees remains uncertain. A press release concerning the transition noted that employment opportunities for Big Lots associates would be contingent upon the needs of the newly acquired stores and distribution centers.
Macy’s
In February 2024, Macy’s launched its “Bold New Chapter” initiative aimed at revitalizing the storied brand. However, in January 2025, the retailer announced the impending closure of 66 underperforming stores as part of its consolidation strategy, focusing more on its remaining 350 locations. CEO Tony Spring outlined the company’s approach, indicating that these closures were part of a broader strategy to concentrate resources where they could have the most impact. Clearance sales commenced shortly after the announcement, intended to last several weeks across affected locations.
Party City
In a hard blow for party supply enthusiasts, Party City revealed in December 2024 its decision to cease operations after over 40 years in business. The company initially filed for bankruptcy in January 2023 but managed to emerge shortly thereafter in September of the same year. However, the challenging economic landscape ultimately led to a second Chapter 11 filing. CEO Barry Litwin communicated to employees the difficult nature of the decision, attributing the wind-down to extensive “exhaustive efforts” to adapt to a tough environment marked by rising inflation and varying consumer spending behaviors.
Joann
Robust declines have also affected Joann, which confirmed plans in February 2025 to close its 800 stores, resulting in significant layoffs that would leave approximately 19,000 employees without jobs. The interim CEO, Michael Prendergast, emphasized that the company continued to pursue cost management strategies since its transition to a private entity in April. Joann is currently offering sales up to 50% off, indicating its push to liquidate existing stock rapidly.
The Impact on Retail Landscape
According to analysis from Coresight Research, an anticipated surge of up to 15,000 store closures may occur across the U.S. this year, dramatically exceeding the 7,325 closures reported in 2024. This situation illustrates the volatile nature of the retail sector, underscoring the challenges businesses face amidst shifting consumer preferences and economic pressures.
Conclusion
The trend of Chapter 11 filings represents a significant chapter in the American retail narrative. While such filings often result in store closures and layoffs, they include possibilities for restructuring and future growth—provided that companies can navigate the challenges ahead.
