The damage from the Covid pandemic continues to wreak havoc on businesses that would have otherwise been successful.
In retail that effect was obvious. People couldn't or didn't shop at certain types of stores for many months, forcing those stores into more debt.
Party City and David's Bridal, two companies that survived Chapter 11 bankruptcy filings, suffered because people simply weren't throwing parties or getting married. You don't need a wedding dress when you've postponed your marriage until you can host a proper event, and you don't need party items to celebrate in lockdown.
Related: Analyst: Beloved mall retailer facing Chapter 11 bankruptcy
Other retailers were not so lucky. Bed Bath & Beyond, Tuesday Morning, and Christmas Tree Shops simply ran out of cash because they had no significant sales for many months. During quarantine periods, when the American public was largely confined to home, people could go to supermarkets and other essential retailers, but they did not shop for fun.
They also did not need new clothing or the various household items sold by those three chains, creating a situation from which those retailers could not recover. All three were liquidated after filing for Chapter 7 bankruptcy.
However, retailers weren't the only brands that suffered. People also did not travel during that period. It wasn't just that people didn't take vacations. It was also that Americans did not have to commute to work because their offices were closed.
The lack of leisure travel and the lack of travelers bankrupted a true American institution.
Image source: Pixabay.
Travel and cruise company files for bankruptcy
Some companies operate in plain sight, but the public may not be aware of their brands. That's the case with Hornblower Group, which operates American Queen Voyages, City Experiences and Journey Beyond.
“Our organization's brand heritage dates back nearly 100 years, with the establishment of Boston Harbor Cruises in Massachusetts in 1926; on the West Coast of the United States, Hornblower Group began in 1980. Across our growing portfolio, we have long history of expertise and innovation and have continually redefined the marine hospitality industry,” the company said on its website.
At the time of its Chapter 11 filing, the company operates in 125 U.S. cities and 111 countries. Their products include everything from transportation services to overnight cruises and other water experiences.
The company has its US headquarters in San Francisco and operates Journey Beyond, a leading experiential travel group in Australia.
“Based in Adelaide, Journey Beyond offers guests a unique experience through its portfolio of offerings that include trains such as the popular Ghan, planes, accommodation in the Outback, underwater accommodation on the Great Barrier Reef, the Melbourne Skydeck experience and more,” the company shared.
Hornblower has a bankruptcy plan
Hornblower filed for bankruptcy as a way to sell the brand and its investors took a larger stake in the company.
“Under the terms of the agreement, funds managed by Strategic Value Partners, LLC and its affiliates, a global alternative investment firm, will acquire majority ownership of Hornblower and provide a significant equity investment in the business,” the company said in a statement. Press release. . “Crestview Partners will retain a significant minority position in Hornblower and will become the sole owner of Journey Beyond.”
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Under the terms of the deal, Hornblower will receive $121 million in new financing from funds managed by Strategic-Value and Crestview, and the company's total debt will be reduced by about $720 million.
In the company's bankruptcy filing, it reported that its debt ranged between $1 billion and $10 billion.
As part of the bankruptcy process, Hornblower plans to try to sell his overnight cruise business, American Queen Voyages. If a sale cannot be made, the company plans to close that business.
The company specifically cited the Covid pandemic and the failure of business to recover from that period as behind the decision to sell or close American Queen Voyages.
“These collective actions will allow Hornblower to move forward with a more focused portfolio, stronger balance sheet and additional financial flexibility, well positioned to continue driving growth in its core land- and water-based experiences businesses,” the company said. “These core businesses are delivering great results and serving thousands of guests every day.”
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