Abstract

East West University

Submitted by:

Nabila Shabab
Samia Afrin
Ashraful Habib
In class exercise Week 3 

Topic: What made some companies to wind up their business due to Covid 19 pandemic?
What lessons can we draw from the assessment of these companies? 

1. List those major companies that had to wind up their business due to Covid 19
pandemic.

All this started at the end of December 2019, originated from China. Gradually, it spread all over
the world. The entire world has experienced a deadly virus named “COVID-19”. The world has
experienced the desolation and devastation of this new disease. COVID-19 has spread very
rapidly all over world. No country could save themselves from this global pandemic, affecting
approx. 200 countries and uncountable people died during this pandemic period. Some lost their
family; some lost their businesses. This pandemic caused socioeconomic crisis and mental stress.
It has created unemployment, deprivation, hunger, and social conflict. Even the rich countries
could not afford to tackle this virus from spreading out. Many businesses were forced to shut
down their operations to cover up their losses. This virus was a curse for the middle to lower
middle-class people mostly.

As the pandemic passed rapidly across the globe in 2020, a new crisis began to emerge:
Bankruptcy. This caused suffering mostly for the startups, those who entered the year with new
hope, faced a new reality that made them shut down their operations, close down stores.

Virus infected cases were increasing day by day, caused the population to stay home and work
remotely. COVID-19 was a curse for many economic sectors. Some of the sectors made their
highest revenue during this pandemic though. But, in this topic, we will only identify the losers
due to CORONA VIRUS.

The mostly affected sectors during COVID-19 are:

 1. Restaurant business
2. Entertainment sectors like movie theaters, shopping malls, concerts etc.
3. Educational institutes
4. RMG sectors
5. Beauty salons
6. Tourism businesses

Despite of facing immense losses, some of the sectors refused to go with the flow and brought
great marketing with innovation, creativity, prompt services, online services to remain
competitive.

List of major companies that had to wind up their businesses due to COVID-19:
(International perspective)

As already mentioned, some of the businesses made their highest revenue during this pandemic.
But some businesses could not afford to stay and had to wind up their operations. Some of them
are:

1. Hertz Global Holdings

2. J. Crew (Lifestyle brand)
3. GNC holdings Inc. (General Nutrition Centers)
4. Whiting Petroleum Corp. (WLL)
5. Tailored brands

Above mentioned businesses are from international perspective. Al of the businesses went
bankruptcy during COVID-19. COVID-19 was surely not a blessing for them.

2. List the reasons that they and other stakeholders cited as the main reasons for such
fate of these companies.

The reasons:
Pandemic period was hard for companies, but for some companies, it was even harder. Low or
non-existent consumer demand reduced spending and stay at home orders crushed many
businesses. Even though the economy started to reopen slowly, social distancing norms kept
most consumers away from the market. Hence, caused bankruptcy for many companies.

The reasons behind the bankruptcy of the above-mentioned organizations are:

1. Hertz Global Holdings: The Hertz Corporation, a subsidiary of Hertz Global Holdings,
Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North
America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia,
and New Zealand. The Hertz Corporation is a vehicle rental company. They rent cars to
their customers for traveling form one city to another. Hertz operates in 160 countries.
[ CITATION HER21 \l 1033 ] . We know that tourism business suffered much during
pandemic. World declined traveling to stop the outbreak of this deadly virus. People were
asked to stay home and stop visiting other places, inside or outside their country. This
situation was very much alarming for Hertz. Their rental cars were stuck in their garages
and daily operations were shattered. They decided to sell their cars, but they failed find
out any buyer as the global pandemic was going on. By that time, they had almost $18
billion debt. When the company was not able to pay their debt by April 2020, situation
got worst for them. Hertz declared bankruptcy on May 22,2020 [CITATION Ree211 \l
1033 ].
2. J. Crew: This pandemic situation was not getting any better. It was very clear that retail
businesses are at stake. Govt. declared to close the shopping malls and customers locked
up at home. As a result, sales went down, and this hampered a lot economically. J. Crew
as a clothing brand, suffered no less. The amount of online clothing businesses was
increasing. J. Crew had physical stores but no e-commerce site. They found themselves in
no position. Hence, they declared bankruptcy in May and paid nearly $2 billion debt. In
September, J. Crew decided to sell their business to one of their largest lenders,
“Anchorage Capital Group”. Anchorage Capital decided to take over J. Crew and now
they operate the total business [ CITATION Ree212 \l 1033 ].
3. GNC Holdings: GNC holdings also known as General Nutrition Center, is company
specializes in health and nutrition related products, including vitamins, supplements,
minerals, herbs, sports nutrition, diet, and energy products [ CITATION GNC21 \l 1033 ].
During this pandemic, their demand goes up as people tend to stay home and take
supplements to keep their body fit. Despite of having huge demand, GNC was burdened
by $900 million in debt while heading into 2020. Lower sales, physical stores shut down
led GNC to declare bankruptcy in June. GNC failed to supply products compared to their
increasing demand. Hence, bankruptcy occurred, and a Chinese company Harbin
Pharmaceuticals took over their operations for good [ CITATION Ree20 \l 1033 ]
4. Whiting Petroleum Corp: Whiting Petroleum Corporation is independent exploration
and production companies in the USA with an oil focused asset based [ CITATION ABO21 \l
1033 ]. Whiting is oil producer organization. During pandemic, the price of oil went
down. Whiting Petroleum was already struggling to cover the enormous debt which it
took by the end of 2019. With hundreds of millions of dollars in debt coming due during
2020, plus several billion previous debts over the following years, Whiting was in huge
trouble. Within 3 months their share price went down, and they declared bankruptcy on
April 1 [ CITATION Jon20 \l 1033 ]. However, Whiting tried to get back on feet by
September after reducing debt by $3 billion [ CITATION Mik20 \l 1033 ].
5. Tailored brands: This brand works for making customized, personal menswear like suit,
shirts Jos, pants etc., parent company of Men’s Warehouse and Jos. During COVID-19,
people hardly got out. All the companies declared to work from home. Presentations,
formal meetings were conducted online, and the demand of tailoring formal attires went
zero. Not only shoppers avoided stores, but they were avoiding the occasions that call for
new apparel. Tailored brand’s sales were failing consistently. In the first half of 2020,
tailored brands declared temporary closure of their stores and their sales fell by nearly
60% [ CITATION Ung21 \l 1033 ]. Tailored brands filed bankruptcy in August and closed
around 500 locations [ CITATION Ree213 \l 1033 ].

3. Apply the holistic marketing dimensions and assess which particular dimension of
holistic marketing they couldn’t apply properly?  
Holistic marketing makes a brand more consistent and cohesive across all aspects. Holistic
marketing can help a small business get more out of its marketing efforts. All businesses possess
different features which must be assessed and evaluated. It doesn’t matter how big or small they
are. So, businesses need a holistic marketing approach. Include the different systems, services,
processes and customer touch points. The process can prove advantageous to small businesses as
well as larger companies.

Hertz Global Holdings:

Hertz Global Holdings, a car rental company also has traditional credit lines, loans and bonds
with conditions that can trigger defaults based on missing those lease payments or failing to meet
other conditions, such as delivering a timely operating budget and reimbursing funds it has
borrowed. The problem with the accounting report of Hertz Global, Inc. stemmed from poor
management, bad leadership of the organization and unethical practices in their accounting
procedure. If we follow holistic marketing dimensions, we can say Hertz has failed to follow
relationship marketing where they failed to keep good relationship with their partners and
investors, employees.
J. Crew (Lifestyle brand):

J. Crew’s was at serious risk even before the COVID-19 pandemic due to sky-high levels of debt
and a failure to keep up with fashion trends. “Even if there were no pandemic, it wouldn’t have
changed anything,” said Eric Snyder, partner at Wilk Auslander and chairman of the firm’s
bankruptcy department. It means they could not follow integrated marketing strategy where lack
of the pricing strategy, product strategy, placing strategy, promotion strategy and communication
strategy is absent.

GNC holdings Inc. (General Nutrition Centers):

For years, GNC was the country’s go-to retailer for vitamins, protein powders and nutritional
supplements. But by 2015, analysts said, it was rapidly losing market share to chains like
Walmart, Target, CVS and Costco. The rise of e-commerce also chipped away at GNC’s
dominance, as shoppers turned to Amazon and other discount websites for health and wellness
products. (Jeff Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
There were other missteps, too. The retailer, which was “best known for its muscle-building
formulations,” was slow to pivot to natural health, nutrition and wellness products popular
among baby boomers. Further adding, Many GNC stores are located in second- and third-tier
malls, where traffic has dwindled for years. By 2016, both sales and profits had begun to decline.
The company was also aggressively buying back shares of its stock using large swaths of
borrowed money, which left it deeply indebted at the same time that profits fell off a cliff. It
means they could not follow performance marketing which involves the sales revenue and
environmental Strategy.

Whiting Petroleum Corp. (WLL)

Even before the impact of COVID-19, Whiting Petroleum was grappling with multiple
challenges such as lowered production due to harsh weather conditions; nearly 55% of unhedged
risk exposure to oil price against production; higher average cost of production; US$64m in
deficiency payments for shortfalls in delivering minimum committed volumes; and a decreased
lending base under credit agreement, left the company with merely US$9 million in cash by Dec
2019. It means they could not follow performance marketing where they failed to produce lower
production volume under environmental factor for harsh weather.

Tailored Brands 

Apparel retailers have been among the worst hit from the coronavirus crisis as their businesses
were considered non-essential and their stores had to be closed. They were forced to limit
operations to online, which led to furloughing of staff and unpaid leases and rents. It means they
could not follow relationship marketing where they failed to keep up good relation and maintain
good faith, relation with their customers, staffs and partners, financial community.
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