Following a three-year run of retail failures, the recent pandemic has taken more companies over the edge.Most of this year’s failures though are the result of an accumulation of problems, mainly:Too much debtLost touch with their customersOver expansionBad, But Not That BadBankruptcy sounds scary. It’s certainly not good news. But it’s not necessarily the end of the road either.In recent years, most apparel brands and retailers that have filed for Chapter 11 or have gone into adminstration come out of it fairly quickly – typically in less than a year.Between 2016-2019, roughly 22 major U.S. fashion retailers have filed for Chapter 11. Only two ended up in liquidation. The other 20 restructured or were acquired. Between 2016-2019, roughly 22 major U.S. fashion retailers have filed for Chapter 11. At least 20 are back in business. Pandemic PanicSince the coronavirus outbreak, 11 more fashion retailers have gone into Chapter 11. Each was headed in that direction, even without a pandemic. The lockdowns killed sales, but they also paved the way forward for many ailing retailers, allowing them to get rid of excess stores, reduce debt and cut staffing.JCPenney went into its bankruptcy filing with support from key lenders already in place. Part of that included reducing the company's debt load. That’s not a guarantee of success, but it has given the retailer another chance to turn around its business.Tuesday Morning, an off price retailer, filed for Chapter 11 on May 27. This came after running at a loss for three years. However, on June 4 the company issued a press release stating that it had secured $25 million in additional financing. Centric Brands, a brand licensing company, filed on May 18. It went intoChapter 11 with its lenders on board. Debtor-in-possession financing of $435 million is allowing it to continue operating. Centric will emerge as a private company. The company’s own brands include Hudson, Robert Graham, Swims, Zac Posen and Avirex. Centric also licenses more than 100 well known labels, including Calvin Klein, Tommy Hilfiger, Nautica, Hudson Jeans and Under Armour in apparel, as well as other brands for accessories.Aldo Group (Canada) filed on May 7 in the United States, followed by filings in Canada and the UK. The shoe retailer has stores in more than 100 countries. The Group notes roughly 3,000 points of sale with 700 directly owned stores and the remainder as franchises. There are 289 stores in Canada and 429 in the U.S.Under Chapter 11 protection and Chapter 15 (in Canada), the company could get out from under its combined US$176.5 million debt pile. It will likely close some or all of its stores and ramp up its online channel. Neiman Marcus also filed for Chapter 11 protection on May 7. The U.S.-base chain of 67 department stores had been slowly sufficating under a heap of private equity debt. A big advantage is the e-commerce accounts for 30 percent of Neiman Marcus’ sales. There’s also been talk about a merger with Saks Fifth Avenue.On the downside, the post-pandemic outlook for luxury is rather bleak.J. Crew filed for bankruptcy protection on May 4 and no one was surprised.Like many other retailers, J. Crew was drowing in private equity debt. Prior to the pandemic, it had hope to do an IPO for its popular Madewell brand, which would have provide the company with much needed cash.Despite having lost touch with its customers and its financial woes, J. Crew still has brand power. As history has proven, brands are a saleable asset. J. Crew will likely emerge from bankruptcy or be acquired (hopefully not by another private equity group).Gone Forever?Other retailers are most likely gone forever. Sporting goods retailer Modell’s filed for Chapter 11 protection, but opted to liquidate the business and possibly sell its intellectual property.Roots, a Canadian retailer with a solid footprint in the U.S., filed for Chapter 7 (liquidation) in the U.S. It is considering coming back as an e-commerce player.There’s more …Other retailers are likely to file for Chapter 11 this year, including J. Jill, Tailored Brands (Mens Warehouse, Jos. A. Bank and K&G brands) and Ascena Retail Group (Ann Taylor, Loft, Lane Bryant). Each has been struggling since before the pandemic. The retail closures in April and May simply made a bad situation worse. Who’s the LoserWhile Chapter 11 doesn’t often point to clear winners, generally suppliers/vendors are the clear losers.Money owed to vendors (which usually includes landlords as well suppliers) is subordinate to bank debt. This leaves them with having to settle for cents on the dollar in payment.At the same time, with the retailer still operating, there are opportunities to continue to sell to them. It’s an opportunity that comes with a lot of risk, but perhaps not much more than selling to other retailers.For vendors, the challenge is now to manage risk while trying to grow sales. An unenviable position to be in these days.