Pub. 1 2021 Issue 2

6 | The Show-Me Banker Magazine LEGAL EAGLE SPOTLIGHT Kris Dekker Peter Riggs Spencer Fane LLP Spencer Fane LLP 1. What business trends were accelerated or exacerbated by COVID-19 in 2020? As we look back on what was a truly historic year, it bears noting at the outset that the disruption and suffering that so many people experienced in 2020 can hardly be overstated. The loss of life, of human con- nection, of jobs, and of economic opportu- nities, was unlike anything we have seen in modern times. We should never lose sight of the human impact of this pandemic and, as we look forward to hopefully better days in 2021, we must remain mindful of the dev- astating impacts of COVID-19 on so many people’s lives. From an exclusively economic perspective, the most significant story of 2020 was the degree to which federal stimulus was able to significantly mitigate the impact that the pandemic had on the economy. Once it became clear that COVID-19 was spreading rapidly in the United States and restrictions on person-to-person contact would be required, analysts predicted waves of com- mercial bankruptcies across numerous in- dustries. Ultimately, however, while it was an active year for commercial bankrupt- cies, the volume of filings was substantially less than predicted, predominately because of government stimulus, in the form of PPP and other loans, stimulus payments, and expanded unemployment benefits that helped maintain consumer spending and prevent even greater job losses. The impact of the pandemic across different sectors of the economy was by no means uniform. Certain sectors faced devastating impacts, while others thrived. Not surpris- ingly, many companies were able to adapt to the pandemic using new delivery models for their products and services, some of which may continue after the pandemic. Physical Retail Since the emergence of online retail, physical retail (retail operating in physical locations rather than online) has been in decline, and the pandemic has accelerated that decline. In 2020, the pandemic-relat- ed restrictions caused physical retail to experience a significant drop in foot traffic. Compounding the problem for physical retail is that the restrictions, in many cases, pushed consumers to find online alternatives, which could very well impact consumer behavior beyond the pandemic. Notable retailers that sought bankruptcy protection in 2020, include JC Penny Co. Inc., Neiman Marcus Group Inc., Lord & Taylor, Guitar Center, Tailored Brands (including retail brands Men’s Wearhouse and Jos. A. Bank), Ascena Retail (including retail brands Ann Taylor and Loft), GNC, J. Crew, Brooks Brothers, Stein Mart, Pier 1 Imports, Century 21 Department Stores LLC, True Religion, and Sur La Table. The decline in physical retail has also im- pacted commercial real estate. Struggling retailers became unable to pay rent, which impacted income and property values for commercial property owners. Two major mall owners filed for bankruptcy protection this past year: CBL Properties and PREIT.