Brian Kelly, founder of Point Guy, talks about how the bankruptcy of Spirit Airlines could affect travel.
In 2024, several well-known companies filed for bankruptcy protection in the United States. Some have filed for initial financial restructuring, allowing them to continue operating, while others have announced the closure of many physical locations to avoid liquidation.
Retail stores were hit the hardest. However, several restaurant chains and an airline were affected.
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LOS ANGELES, CA – JUNE 01: A Spirit Airlines plane takes off at Los Angeles International Airport (LAX) on June 1, 2023 in Los Angeles, California. More than 40 percent of Spirit Airlines flights across the country were delayed today (Getty Images)
Spirit Airlines
The budget airline filed for Chapter 11 bankruptcy protection in November, with more than $1 billion in debt payments looming and more than $2.5 billion in accumulated losses as of 2020. Spirit faces challenges such as downsizing. passenger numbers during the pandemic, competition from major airlines, and most notably, the blocked merger with JetBlue.
Despite the filing, Spirit will continue to operate as customers can book flights and use frequent flyer points.
Carle Place, NY: Big Lots store in Carle Place, New York on July 23, 2024. (Howard Schnapp/Newsday RM via Getty Images/Getty Images)
Large lots
The discount retailer, with more than 1,300 locations, filed for bankruptcy protection in September. With sales falling and debt mounting to $3.1 billion, the department store initially announced it would close approximately 545 stores. The company later announced it would close all 963 remaining locations due to a failed deal with private equity firm Nexus Capital.
However, on Dec. 27, the company announced an agreement with Gordon Brothers Retail Partners LLC that would prevent the potential closure of all other locations. There are no details yet on which locations will remain open, and the deal still needs to be approved by a bankruptcy judge.
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A Red Lobster restaurant in Alexandria, Virginia, on Friday, June 7, 2024. Seafood restaurant chain Red Lobster, which filed for bankruptcy last month, will be in bankruptcy court on June 14. (Photo: Ting Shen/Bloomberg via Getty Images/Getty Images)
Red crab
The seafood chain, which opened its first location in Lakeland, Fla., in 1968, filed for Chapter 11 bankruptcy protection in May. The company faced significant financial challenges, including higher food costs, higher wages and increased commercial rents. Food prices also stopped traffic as more people decided to cook at home.
Some analysts also pointed to Red Lobster's “endless shrimp” deal, where customers could eat as much shrimp as they wanted for just $20. A report in the Los Angeles Times spoke to a woman who boasted of eating 108 shrimp during a four-hour meal.
Jim Salera, research analyst at Stephens, focuses on restaurants and packaged foods. are parties.” and drinks, he told FOX Business. “The goal of any kind of deal like this is that you get customers, and then add incremental purchases to the ticket, whether it's alcohol or, you know, appetizers, things like that extend the ticket. “
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“You have a small profit margin right now,” Salera said. When you're attracting customers who are just looking to own or engage with that one item and aren't branching out in some way down the list, you can easily go above and beyond.
Eric Rolle of Fox Business contributed to this report.