Please read the three articles under attatched. Then answer the following questions Thank you

1. What does Chapter 11 mean for J. Crew and Neiman Marcus?
2. Is the shift to online shopping a permanent one?
3. Does the change to online also track withother trends in workplace automation?

1st article

J.Crew, Neiman Marcus, and Others Are Filing For Bankruptcy. What Does That Mean, Exactly?

Chapter 11 bankruptcy, explained.

BYCAM WOLF

May 12, 2020

A J.Crew store in New York, May 4, 2020.Getty Images

The word "bankruptcy" comes with dark undertones:J.Crew announced it was filing for Chapter 11 bankruptcylast week, for example, and was immediately the subject of instantaneous eulogies, ours included. Over the weekend, my mom lamented that she wouldn't be able to shop there anymore while the brand was in fact still operational: "sunny days ahead," the advertisement prominently displayed on its website read. But I can't blame mom or anyone else who buried J.Crew, Neiman Marcus, John Varvatos, or the other retailers who have filed for Chapter 11bankruptcy is more confusing thanMichael Scott thinks. To try and understand it, I phoned a couple of bankruptcy experts for help and started with my mom's first question.

Wait, the stores and brands declaring bankrupt are staying open for now?

You betcha. J.Crew wrote out inits FAQ section, "We are and will remain fully operational throughout this restructuring process." Without COVID-19-related shutdowns, your local stores would probably be open right now ready to get you into some oxford-cloth button-down shirts or waxed jackets.

So what does bankruptcy mean, then?

"There are several different kinds of bankruptcy," explains Nancy B. Rapoport, a professor of law at William S. Boyd School of Law, University of Nevada, Las Vegas who specializes in bankruptcy and was involved with Toys"R"Us's Chapter 11 case. "What you tend to see is one of two things: a Chapter 11 reorganization or a Chapter 7 liquidation. That's a gross oversimplification." But gross oversimplifications will mostly do for now, so stick with me.

The bankruptcy process allows a company in unsustainably deep debt to pay back its lenders. The most gruesome way to do that is Chapter 7: the company is sliced up and absolutely everything is sold off, with the proceeds going to the creditors. "Everything from the inventory to the trademarked names to the toilet paper in the executive washroom," says Robert M. Lawless, a professor of law specializing in bankruptcy at the University of Illinois College of Law.

That seems bad!

Itisbad, and for more than the reasons you think. Not only does the business go out of business, but the banks that have lent the bankrupt company over the years are incredibly unlikely to get their money back from toilet paper (even the premo stuff executives use). So for all parties involved, Chapter 11 is preferred. "The lenders want to get paid back and they know the best way to get paid back is by having the business continue to operate and be profitable," says Lawless.

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Chapter 11 is ultimately an optimistic action to take. "What you're seeing is a hope that the business itself is fundamentally sound and can be reorganized by getting rid of some things that are burdensome and starting with some new rules," says Rapoport.

Why now? A company like J.Crew was already operating with $1.65 billion in debt.

"Usually you see a company end up in Chapter 11 when they run out of cash," says Lawless. Presumably, these companies tapped into every resource and weren't able to make enough cash to remain operational. That's when you turn the page andbangChapter 11.

Explain what happens next using words or less.

The company will create plan to save or sell its business.

OK, a few more words than that.

Using J.Crew as an example, the company and the law firm it's partnered with will put together a reorganization plan intended to get the company back to profitabilityand that makes it possible for lenders to get paid back fairly. The plan is presented in bankruptcy court. "The debtor, or whoever's proposing the plan, has to put on evidence to prove feasibility," says Rapoport. "You put on experts, they testify, someone can cross examine them, and then the goal is to figure out a plan so they won't be back [in bankruptcy]."

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If a plan for reorganization can't be agreed upon, the company moves into a sale. Forever 21 went through this, and was eventually bought up by Simon Property Group, the largest owner of shopping malls in the U.S. Lawless says that while a generation ago, reorganizations were common, asset sales are now much more standard. The money made from these sales goes directly into the pockets of the creditors these companies owe.

The third way this goes down is the company enters bankruptcy with a "pre-packaged plan." "If you want to be really cool, the cool kids in the bankruptcy lawyers' offices call it a pre-pack," says Lawless. We're cool, right? Right. Thispre-packincludes formal agreements for moving forward with its lenders in the initial bankruptcy filing. Typically, this means a company can exit Chapter 11 relatively quicklyseveral months is quick in the bankruptcy world. Otherwise, cases can drag on for years. J.Crew filed a "prearranged" Chapter 11, which is a much looser agreement with its creditorsand not at all guaranteed to ensure swift and steady proceedings.

Explain it to me like I'm 10.

Imagine you owned and operated a lemonade stand, and in 2010 you sold it to some private-equity firmswe'll call them mom and dadand used the cash to buy, like, fancy Meyer lemons. The firms allowed you to keep running the stand, provided you continue to kick them the profits. Which is totally fine, because in this scenario your lemonade stand is absolutely crushing ityou're basically teaching men what great lemonade tastes like! But after a few years, your once-loyal lemonade stand customers stop coming around: the lemonade is too expensive, they say. Mom and dad are done paying your allowanceand now you can no longer afford to pay for the lemonade stand. Now, you have two options: find a way to reinvent your lemonade standor sell it off to someone else.

How do you exit Chapter 11?

If a plan for operating the business is agreed upon or a sale reached, the companies formally exit the bankruptcy process. "And then you call it consummating the plan," says Rapoport, "which sounds sexier than it is." (Hubba hubba.)

It's likely that the companies going through bankruptcies will move forward with either an agreed-upon reorganization or sale. Courts often want bankrupt companies to succeed rather than file for liquidation, "because it's better for the economy if businesses keep going," says Rapoport. This way people keep their jobs, creditors continue to get paid, and there are less vacant storefronts. Lawless says courts are already pretty lenient when approving bankruptcy plans for exactly that reason. Too lenient, perhaps: in a study he conducted, he found that almost none of the business projections companies sunnily forecast in bankruptcy court are ever actually achieved. "Bankruptcy judges want companies to succeed," he says.

How will COVID-19 affect these filings?

Despite the fact that courts already go relatively easy on companies in bankruptcy, Lawless says that the pandemic might encourage them to be even gentler. Now, companies can argue that the cause of their great financial strain is this once-in-a-lifetime global event. "With Neiman Marcus, what you're hoping is [that] some of this was COVID," says Rapoport. "They couldn't keep the stores open and although there's online shopping, it's not the same thing. So if they think that this is a temporary problem, the leases are too high and they can't get relief on the leases but the fundamental business is sound."That may not be totally true, but it's an argument Neiman Marcus can make.

How will this affectme, the shopper?

Well, ideally, not a whole lot. As we've covered, the whole deal with Chapter 11 is that it allows a company to maneuver itself to stay in business. Now it's possible that some of those maneuverings affect you. The brands that have filed for bankruptcy will likely shed the leases on poor-performing stores on the path back to profitability. When Forever 21 went through Chapter 11,it closed 200 stores.Consider it highly likely that J.Crew and Neiman Marcus will trim some brick-and-mortar fat.

2nd article

Paper Source retail chain files for Chapter 11 bankruptcy protection, will close 11 stores

Nathan Bomey

USA TODAY

0:26

0:42

Paper Source, which sells greeting cards, paper goods and custom invitations, filed for Chapter 11 bankruptcy protection on Tuesday after sales plummeted due to the pandemic.

The move marks a reversal for a company that was expanding as recently as a year ago, having acquired some from its liquidating rival Papyrus right before COVID-19 hit.

It also marks another setback for the greeting card industry,which has been slumping in recent years amid the rise of digital competition.

Chicago-based Paper Source, which has about 1,700 employees, plans to close at least 11 of its 158 stores while attempting to secure rent concessions and evaluating other locations, according to a court filing.

Volvo to go all electric:Automaker plans to sell only electric vehicles by 2030

Winter storm fallout:Texas electricity provider files Chapter 11 bankruptcy

Before COVID-19, the company "had been enjoying rapid expansion and sustained sales growth, and had recently undertaken a significant acquisition," chief financial officer Ronald Kruczynski said in a court filing. "However, as with many other retail brands, (Paper Source has) sustained deep damage to their finances and operations as a result of the ongoing COVID-19 pandemic."

The company said it had reached a tentative deal to sell its assets as an operational business toMidCap Funding Investment XI LLC, an affiliate of MidCap Financial Trust, or a higher bidder if one emerges.

Founded bySusan Lindstrom in 1983 as a single store selling handcrafted paper, Paper Source had grown into 27 locations by the time she sold a majority staketo private equity firmBrentwood Associates.

After that deal, Paper Source expanded quickly, reaching 51 locations by 2011.

CEO Winnie Parktold USA TODAY in early 2019that the company had 128 locations after adding 50 over the previous five years.

"Part of the magic of what we bring to market is a selection that has been curated that is totally unique," Park said at the time. "I would say that actually, nearly half our customer base is millennials, and they definitively buy greeting cards."

In March 2020, the company completed the acquisition of 27 stores from Papyrus, bringing its footprint to 161 locations.

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But the pandemic erupted shortly thereafter, forcing Paper Source to close all of its stores for at least two months.

With its stores shuttered, the company missed out on sales of cards for Easter,Mother's Day and many summer weddings. Closed storesreopened later in the spring or summer, but the retailer had sustained significant damage.

In 2020, sales totaled about $104 million, down from2019's $153million, according to court records.

To offset the declining revenue, Paper Sourcetried to get rent concessions from landlords in the early going of the pandemic but didn't have enough success.

"Many landlords made no concessions," Kruczynski said.

The bright side was that the company's online business grew from 10% of overall sales in 2019 to 24% in 2020.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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3rd article

Americans Keep Clicking to Buy, Minting New Online Shopping Winners

ByNathaniel PopperMay 13, 2020

Change in consumer spending

%

+40

+20

0

-20

-40

Total online sales

Total in-store sales

Total consumer spending

March 1

March 15

April 1

April 15

First stimulus checks deposited

National distancing guidelines issued

Note: Year-over-year change through April 29Source: Earnest Research

Online sales in the United States have surged in recent weeks, after shelter-in-place measures enacted in March shuttered brick-and-mortar stores throughout the country.

While the shutdowns immediately alteredhow people spent their money, the patterns have continued to shift as the weeks have gone on, new data shows, shaped by waves of panic buying and even payouts of government aid. The latest bump in online spending came after the government sent out stimulus payments to tens of millions of American households beginning onApril 11.

Beyond what might be temporary shifts, consumer habits appear to be changing in ways that may well endure beyond the pandemic and determine who will become the most important online players.

Change in sales for major e-commerce categories

%

+300

+200

+100

0

Restaurant Delivery

General Merchandise

Apparel

Electronics

Online Grocers

March 1

March 15

April 1

April 15

Note: Year-over-year change through April 29Source: Earnest Research

Big and sometimes unexpected winners have emerged in several of the industries that have come to define the coronavirus economy, according to data from Earnest Research, which tracks millions of credit and debit card transactions in the United States. Many e-commerce companies are now in a much stronger position than before. But even within the areas of rapid growth, the recent gains have not been spread evenly.

In grocery delivery, there is

Instacart, and then everyone else

Change in online sales for grocery delivery companies

%

+500

+400

+300

+200

+100

0

Amazon

FreshDirect

Instacart

Peapod

Target

Walmart

March 1

March 15

April 1

April 15

Relative share of online sales in January

11

25

7

50%

Amazon

FreshDirect

Instacart

Peapod

Target

Walmart

Note: Year-over-year change in sales through April 29Source: Earnest Research

There are few activities that have been upended more than grocery shopping, which had long been analog andresisted the world of online commerce. All that changed in a few short weeks, as people were told to stay home, without their need for food diminishing. According toseveralsurveys, more than a third of all Americans have ordered groceries online for the first time over the last month, and people have spent more ordering groceries online each succeeding week of the crisis.

The clear winner so far has been Instacart. It was not the biggest going into the crisis, but it has the advantage of working with several grocery chains rather than directly selling products on its own, unlike most of its competitors.

The popularity of online grocery shopping has meant that some services havestrained to meet the demand and this could diminish the long-term appeal of the services.

FreshDirect and Peapod have been relatively flat, according to Earnest's data, despite being some of the most established names in the industry. FreshDirect, which is largely focused on New York,talked publiclyabout its difficulty finding healthy employees. Peapod madeill-timed cutbacksright before the virus hit.

The central battle now is most likely between Instacart and the biggest forces in online retailing, Amazon, Walmart and Target, all of which have been investing more heavily in grocery sales. Walmart had the biggest established presence, but it has grown more slowly than Amazon and Target.

In overall e-commerce, Target and Walmart

have been gaining on the behemoth, Amazon

Change in sales for e-commerce giants

%

500

400

300

200

100

0

Amazon

Target

Walmart

March 1

March 15

April 1

April 15

Relative share of online sales in January

96%

Amazon

Walmart

Target

Note: Year-over-year change in sales through April 29Source: Earnest Research

This grocery battle is part of a much bigger push by Target and Walmart to take on the behemoth of online shopping, Amazon. Both companies have recently expanded their online sales much faster than Amazon.

Amazon's slower growth is largely explained by the fact that it started with such an enormous lead, and had already attracted many of the Americans willing to shop online.

For Target and Walmart, many of their new sales came from people who had never shopped with them before, while Amazon has relied more heavily on existing customers, according to data from Facteus, a firm that analyzes consumer transactions. Those elevated spending levels may go down at Amazon, but new customers are more likely to stick around.

Target was particularly well positioned going into this crisis because of its purchase of Shipt, a company that specializes in fast delivery of things like groceries. That has helped Target pull even with Amazon recently in terms of delivery time, data from Rakuten Intelligence shows, even as Target's sales have grown.

Average shipping times

days

8

6

4

2

0

Amazon

Target

Walmart

March 1

March 15

April 1

April 15

Source: Rakuten Intelligence

The companies delivering meals

are now chasing DoorDash

Change in online sales for food delivery companies

%

200

150

100

50

0

DoorDash

Grubhub

Postmates

Uber Eats

HelloFresh

Blue Apron

March 1

March 15

April 1

April 15

Relative share of online sales in January

37

27

8

18

8%

DoorDash

Grubhub

Postmates

Uber Eats

HelloFresh

Blue Apron

Note: Year-over-year change in sales through April 29Source: Earnest Research

The crisis has also given a shot in the arm to online restaurant and meal delivery services, which were broadly experiencing slower growth earlier this year.

Grubhub, one of the bigger players in this industry, is now thesubject of acquisition talkswith Uber, which is a bigger company over all, but is smaller when it comes to delivery, through its Uber Eats service.

Grubhub has recently grown more slowly in large part, analysts say, because the company was long focused on independent restaurants, which have been more likely to close during the quarantines, and on New York, where the crisis hit the hardest.

DoorDash, the market leader, has focused on chain restaurants, and areas outside the big cities, where the sense of crisis was less acute. That has allowed it to expand its dominant position in the industry.

Video games, video games, video games

Change in online sales for electronics retailers

%

+1,500

1,000

500

0

Apple

Best Buy

GameStop

Newegg

March 1

March 15

April 1

April 15

Relative share of online sales in January

49

43

7%

Apple

Best Buy

Newegg

GameStop

Note: Year-over-year change in sales through April 29Source: Earnest Research

The electronics industry has long developed its online delivery capabilities, but that has not helped everyone equally. Apple has seen the supply of its biggest seller, the iPhone,crimped by problemswith factories in China. GameStop, on the other hand, was a much smaller player going in but the one thing peoplecan't seem to get enoughof during these days at home is video games.

It's hard to sell clothes, other

than leggings and sweatpants

Change in online sales for apparel companies

%

200

150

100

50

0

-50

Bonobos

Lululemon

MeUndies

Rent the Runway

Stitch Fix

March 1

March 15

April 1

April 15

Relative share of online sales in January

22

10

62%

Bonobos

Lululemon

MeUndies

Rent the Runway

Stitch Fix

Note: Year-over-year change in sales through April 29Source: Earnest Research

The growth of online sales has not been enough to save all e-commerce players. The start-ups that were set up to deliver people their clothing at home have almost all struggled as people have stopped needing nice clothes to go to work. One of the few apparel companies that have been doing well, at least online, is Lululemon, thanks to its generous selection of the sweatpants and leggings that serve as particularly good work clothes when your office is in the basement.

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