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Chapter 11 bankruptcy. What is it?: Video explainer
Bankruptcy is the process for typically heavily-indebted business to reorganize their finances and structure. Learn more
- Economic pressures like inflation, tariffs, and shifts in consumer behavior have hit the retail sector particularly hard.
- Numerous well-known retailers, including Bed Bath & Beyond, Rite Aid, and Party City, have closed all their New Jersey locations.
- Experts predict that retail bankruptcies could continue to increase in 2026 due to economic uncertainty.
It’s tough to be a business owner in New Jersey, whether it’s a Main Street mom and pop shop in the community for decades, or a nationally known big box store chain.
Data by the Wall Street rating agency S&P Global showed that there were 785 bankruptcies in 2025 — the third consecutive year that the number of bankruptcies rose.
The number of bankruptcies in 2025 was the highest since the 828 in 2010 as the nation was reeling from the fallout of the Great Recession two years earlier.
“The increase in bankruptcy filings over the past few years have coincided with rising interest rates, and companies with weaker credit profiles or poor liquidity consequently struggled to refinance existing debt and service new debt at higher rates, leading many to consider bankruptcy as a means to restructuring,” said Umer Khan, an industry expert at S&P Global.
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What is a bankruptcy?
A Chapter 11 bankruptcy does not necessarily mean the company is doomed to go under. It’s a process that some but not all companies survive.
During a bankruptcy process, the company “usually proposes a plan of reorganization to keep its business alive and pay creditors over time,” the U.S. courts website says.
Some major companies that have declared and survived bankruptcy include Apple, General Motors and Marvel Entertainment.
NJ mall retailer says bankruptcies could increase in 2026
Retail bankruptcies could increase in 2026 amid the uncertainty of President Donald Trump’s on-again, off-again tariffs, according to executives at Simon Property Group, a commercial real estate company that owns The Shops at Riverside in Hackensack, The Mall at Short Hills in Essex County and Rockaway Townsquare in Morris County.
David Simon, the CEO, told investors on Feb. 2 that tariffs “probably put more pressure on retailers than should be” and will “end up hurting the small guys.” He said that larger retailers such as Costco, Walmart and Amazon would not be nearly as affected.
Brian McDade, Simon’s chief financial officer, cautioned investors that, “Yeah, we’ll have bankruptcies” in 2026.
Bankruptcies have hit various retail sectors particularly hard since the COVID-19 pandemic, as inflation hit a 40-year high and prices rose sharply on everyday goods. Personal debt has soared to record highs and hiring has slowed.
What are some notable NJ bankruptcies?
The Garden State has lost several businesses found in local downtowns, at malls and long commercial corridors like Routes 4, 17 and 46.
Some have completely gone out of business while others have shrunk their operation to avoid a total closure.
Here are some notable examples in recent years:
At Home
The furniture and home decor retailer announced bankruptcy exit plans in October of 2025 that saw three of its New Jersey stores close, in Ledgewood, Middletown Township and Ocean Township.
The Texas-based company filed for Chapter 11 bankruptcy on June 16, pointing to “broader economic and retail-specific market pressures,” including President Donald Trump’s tariffs on China, in court documents.
Bed Bath & Beyond
Bed Bath & Beyond — known as the go-to spot for shoppers looking to outfit dorm rooms and starter homes, and for keeping them coming back with its iconic big, blue 20% off coupons — announced in 2023 that it was filing for Chapter 11 and would close hundreds of stores across the United States. That included 13 in New Jersey.
Analysts say the chain failed to adapt to the COVID-induced shift to online shopping and therefore couldn’t take advantage of the home decorating boom during the pandemic’s early days.
Buybuy Baby
The baby products retailer tried its hand at a standalone store in Paramus, plus three other brick and mortar locations, but folded in 2024 and returned to an online-only brand.
BuyBuy Baby initially had over 100 stores across the U.S. but liquidated them after the bankruptcy of its parent company, Bed Bath & Beyond.
Christmas Tree Shops
The discount chain known for home goods and seasonal decor liquidated all 70 stores nationwide in 2023, including all 10 stores in New Jersey.
Forever 21
The once-thriving mall fashion retailer closed all 15 New Jersey stores in 2025 after the firm’s leadership said it was unable to keep up with competition from other fashion outlets, as well as rising costs, economic challenges and changing consumer trends.
Joann Fabrics
Joann — known for yarn and needle supplies, thread and fine art supplies, fabric and crafts — shuttered its final 11 New Jersey locations in May of 2025.
The chain saw its business boom during the COVID-19 pandemic, as Americans used the extra time amid stay-at-home orders and the extra money from stimulus payments to delve into crafts.
But that nosedived after the end of the pandemic and many consumers emerged from at-home stays.
Macy’s
While not part of a bankruptcy, the iconic mall anchor department store Macy’s said it’s closing two “underproductive” stores in New Jersey in 2026.
One is at Livingston Mall in Essex County and the other is a “small format” store that opened at the Interstate Shopping Center in Ramsey just over a year ago.
Party City
With its headquarters in Woodcliff Lake, this party goods store filed Chapter 11 bankruptcy in December 2024 for the second time in two years. It shut down all 700 stores, including all those across New Jersey.
Pinstripes
With a location at the Garden State Plaza in Paramus, Pinstripes marketed itself as an “eatertainment” destination with bowling, bocce, booze and bistro-style eating. But it declared bankruptcy in September of 2025 and closed 10 locations, including the one at the Garden State Plaza mall.
Rite Aid
Pharmaceutical giant Rite Aid closed the remainder of its 33 locations across New Jersey in 2025 after a drawn-out bankruptcy period coming out of the pandemic.
Other retail pharmacies, including CVS and Walgreens, have faced similar issues as they overextended themselves into other aspects of retail like groceries and home goods, putting them in direct competition with Walmart and Amazon, experts have said.
Walgreens Boots Alliance announced in October 2024 that it plans to close 1,200 “underperforming” stores nationwide amid weak consumer spending. CVS meanwhile closed 900 stores between 2022 and 2024.
Saks
Saks, the iconic luxury retailer, which has a location at the American Dream mall in East Rutherford, filed for bankruptcy in January of 2026.
Saks Global’s move comes a year after it bought out rival chain Neiman Marcus in a move that saddled Saks with $2 billion in debt.
It also stems from Saks’ struggles with “inflation, rising interest rates, tariff-related uncertainty that disrupted liquidity discussions with potential lenders, and the lingering decline in foot traffic driven by post-COVID shifts in downtown occupancy and reduced in-person work near flagship stores,” according to court filings in the United States Bankruptcy Court in Texas.
Saks’ off-brand store — Saks OFF 5th — closed three New Jersey stores at Chimney Rock in Bridgewater, Shrewsbury Plaza by the Jersey Shore and The Mills at Jersey Gardens in Elizabeth.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.
Email: munozd@northjersey.com; Twitter:@danielmunoz100, Facebook and Instagram
