For smaller businesses, or businesses who have a more niche clientele, the idea of bankruptcy can be especially daunting, especially if they are committed to maintaining a fiduciary responsibility to their clients, community members, employees, and vendors. Not to mention, the recent bankruptcy filing from retailers like Toys ‘R’ Us, Nine West, Claire’s, and others might be another source of anxiety for smaller business owners. After all, each of these companies have been largely successful for years in a rapidly transforming, increasingly internet-based market.
It must be mentioned, however, that there are a number of businesses, both big and small, that have successfully recovered after filing for bankruptcy or coming close to it. We cover some of those below.
It’s hard to believe that one of the world’s largest and most successful tech-based retail giants was at one point at the brink of financial disaster. Though they never officially filed for bankruptcy, Apple was on the verge of financial collapse in 1997. At the last minute, however, their rival and largest competitor to date, Microsoft, invested $150 million dollars into the company, which allowed Apple to experience one of the biggest business comebacks in history. Sources speculate that Microsoft made this investment as a means to save face, so that regulators wouldn’t spectate that the company had a monopoly on the market.
Best Buy is currently the world’s largest and most recognizable brick-and-mortar electronics store. In 2010, however, sales and profits had plummeted, and it looked like the retail giant might have to close down its operation for good. A scandal with the then-CEO in 2012 only seemed to make matters more dire for the electronic goods supplier.
Under the management of the new and current CEO Hubert Joly, things have taken a turn for the better with the electronic retail giant. Joly managed to clean up once-disorganized stores, close locations that were unnecessary and costing the store profits, brought in more exclusive products, and improved customer service. Perhaps most important, however, he transformed the store’s online and in-store experience, making it easier for customers to research in-store and order online.
The Cubs are perhaps most well known for their 100-year losing streak, so it may come as no surprise that the Chicago-based team was at one point on the verge of financial ruin. Although the team has made headlines for their less-than-spectacular performance on the field, the Cubs do have a spectacular attendance record —one of the best in Major League baseball. After the team’s owner, the Tribune Company filed for Chapter 11 bankruptcy in 2009, the Ricketts family, prominent bankers in the Chicago area, later purchased the team for $845 million.
The fashion brand and popular storefront American Apparel has rarely strayed from headlines, whether it be criticism for their racy advertising, issues caused by their controversial founder, Dov Charney, or occasional praise for their labor practices. In October 2015 the fashion chain filed for Chapter 11 bankruptcy, emerging from it the next year as a private company. Now an LLC, the company celebrated its revival by rolling out a new, more simple ad campaign featuring what they deemed to be “luxury” T-shirts.
American Airlines is one in a long list of airline companies that have filed and emerged from bankruptcy, which also includes Delta, United, and Air Canada, to name a few. American Airlines, however, has a particularly impressive recovery.
The company filed for bankruptcy in November 2011. By 2014, American Airlines was profitable for the first time since 2007, and the company has since entered the S&P 500.
For over a century, Kodak was an essential part of the film industry. As times changed, however, Kodak was slow to adapt to the new wave of digital photography, and as a result, the company’s film sales struggled. In January 2012, the company filed for Chapter 11 bankruptcy, and after years of reorganization, rebranding, and a changing their product offerings, Kodak is once again a profitable company who seems to be around for the long haul.
Just over 20 years ago, a severe E. coli outbreak at Jack in the Box restaurants hospitalized 175 people, and killed four children, making headlines throughout the United States. After the scandal, there were a number of layoffs, and most plans for expansions of the chain were put on hold. The company recovered and became the company it is today by enforcing strict food-safety standards and revamping their marketing campaigns.
Whether you’re a big chain, a small business, or an individual struggling with finances, filing for bankruptcy is a difficult pill to swallow. It is important to note, that even in the most dire of financial circumstances, some of the most prolific, well-known, and profitable companies today were once on the brink of bankruptcy.
By Noah Rue
Noah Rue is a writer, a digital nomad, an ESL teacher, and an all around good dude, if he doesn’t say so himself.