The Companies That Benefited From the Pandemic
The United States economy – and the global economy as a whole – needed CPR after the coronavirus pandemic slammed itself into our normal routines and forced entire countries to enter unprecedented states of lockdown.
Millions of Americans found themselves unemployed while small and large businesses alike watched revenues plummet. However, COVID-19 didn’t spell doom for every company.
Dominos, Amazon, DocuSign, and Netflix are just a few of the major corporations that have profited from this crisis. These companies offer products and services that most Americans do need to survive or better navigate the new reality of pandemic life.
Dominos recently posted a 16% rise in U.S comparable sales, compared to only 3% gain a year earlier. It’s not hard to see why; American’s aren’t exactly eager to go grocery shopping. They are seeking quick, easy, contactless delivery instead, and Dominos has mastered that model.
DocuSign is also gaining as the rest of the market dips. It closed at $196.73 on July 28, marking a +0.23% move from the prior trading day and outpacing the S&P 500’s 0.65% loss on the day. Even tech-heavy Nasdaq lost 1.27% on the day, but DocuSign, a tech service, is flying high. This could be attributed to the company’s notary deal that expands its digital offerings in our work-at-home COVID era.
Of course, we all know why Netflix and Amazon are succeeding. There are few necessities in higher demand during quarantine, lockdown, and social distancing than online delivery and live streaming.
The Companies That Couldn’t Survive COVID-19
Despite the success stories, there are far more stories of bankruptcy and business ruin.
“We are seeing an acceleration in bankruptcies that is unprecedented,” said James Hammond, CEO of New Generation Research, which runs BankruptcyData. He predicts that for 2020, “I’m pretty confident we will see more bankruptcies than in any business person’s lifetime.”
Rental car company Hertz became one of the largest bankruptcies in the nation when it announced its bankruptcy on May 22 due to $24,355,000,000 in liabilities. Latam Airlines, J.C Penney, Neiman Marcus, and a number of companies in retail, aviation, and the oil and gas sectors joined them. Every week, the list grows. On July 23, for example, Ascena Retail Group, the owner of Ann Taylor and Lane Bryant, joined their ranks. The company is attempting to escape $1 billion in debt.
New Reality – What Comes Next?
As some familiar, some new, and some unlikely stars rise to the top of the food chain on COVID-19 business profits, others will disappear. “We will see some major chains go away and not come back. These are chains that were struggling before the situation. COVID-19 will put them over the ledge,” predicts Stifel managing director Michael Kollender.
Will the success of companies like Netflix, DocuSign, Zoom, and others continue? It all depends on the customer experience they provide during the pandemic, and how we transition back to something resembling “normal” in 2021.