With stores shut for weeks, employees furloughed and sales plummeting, many major retail stores are planning to file for bankruptcy. The first major retailer to fall victim to the pandemic's economic fallout is clothing chain J. Crew which filed for Chapter 11 bankruptcy.

J. Crew Group Inc. sought bankruptcy protection after shutting 500 stores worldwide. As per a court filing by Michael J. Nicholson, the company's chief operating officer, the significant financial strain caused by COVID-19 will cost the company $900 million in sales due primarily to store closures across all brands. The company reached a debt restructuring support agreement with its lenders and has also secured $400 million of new money financing commitments.

Similarly, with its stores closed nationwide during the pandemic, resulting in a sharp decline in sales, JC Penney shares have declined nearly 80 per cent this year. Bankruptcy is one of many options on the table for the company to become a sustainable, profitable company but at this point, no decision has been made. The company had been in the midst of a major turnaround before the pandemic hit. It has now made the "strategic decision" to skip a bond interest payment that was due April 15. It has a 30-day grace period to continue discussions with lenders and assess its options.

Privately-owned Neiman Marcus is expected to file for bankruptcy soon, according to lenders. It closed its more than 40 stores across the U.S., including Bergdorf Goodman, in mid-March. The group was already struggling prior to the pandemic, with $4.8 billion of outstanding debt, according to S&P Global Ratings.