This is why J.C. Penney, J. Crew and Neiman Marcus going bankrupt matters

Yahoo Finance's Brian Sozzi, Alexis Christoforous, and Andy Serwer discuss why major retailers filling for bankruptcy matters to the major economy.

Video Transcript

ALEXIS CHRISTOFOUROS: The Coronavirus pandemic has impacted just about every sector of our economy. On Friday we heard from the Commerce Department that retail sales fell by the most on record, down more than 16% for the month of April. And this weekend JCPenney announced it would file for bankruptcy. Our editor in chief Andy Serwer is here with more. Andy, I know you wrote something up for the website on this. And you say JCPenney filing for bankruptcy, Neiman Marcus, J.Crew, you say they-- that matters to the larger economy. Why?

ANDY SERWER: Well, that's right, Alexis. I mean, first of all, you know, we talk about hard-hit businesses during the coronavirus pandemic like airlines and hotels, et cetera. But of course, retailing-- and no one knows this better than Brian Sozzi-- was in an apocalyptic time period to begin with. I mean, this has just been such a difficult period. But because Wall Street has been there at the ready always to provide cash, these companies like JCPenney and Sears and Kmart have been able to stay alive as zombies for years and years.

But now with this really terrible economic situation that we're in, you're actually starting to see them hit the wall. And you know, these companies, besides the fact that they employ tens of thousands of Americans, also speak to our cultural and societal history as well. And Brian, you and I can talk about this forever, right?

BRIAN SOZZI: Yeah, that's for sure. But Andy, in your story, you made a very key distinction, I think. There's JCPenney out there, mid-tier department store, tarnished brand. But I think you made a point. A brand like Neiman Marcus holds a special place in many households. I know you mentioned you remember the catalogs there. And maybe a brand like that does survive.

ANDY SERWER: Yeah, I mean, they certainly have the cachet. And JCPenney, you know, I said dead man walking for so many years. But you think about Neiman Marcus, the catalog. And it really, Brian, to me mirrors the oil boom in America. So that's why I'm talking about the societal and cultural history. You know, a Texas store, you know, this is a place where splashy Texans would go and show off their money. And of course it became much bigger than that. And J.Crew has its own, you know, panache as well, right?

ALEXIS CHRISTOFOUROS: All right, we're going to leave it there. Andy Serwer, thanks so much for that, for your thoughts on JCPenney.