The Trifecta of Doom: Companies are folding, banks are reorganizing, and CEOs are jumping ship

During this Idaho day of snowpocalypse, I’ve got some more apocalyptic talk for you. Buckle up for this Thursday’s Thought because I’m taking a break from my usual optimistic (or critical optimist at best) content and introducing you to some topics of doom and gloom that have me on my toes. I’ve got a mess of unflushed out ideas here, so please feel free to add your two cents as I need a lot more perspective on this one.

This week I’m writing about some things that are totally over my head:

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A few months ago when we were sitting in the mall (flashback to our bus story) my husband and I were looking at the JC Penny thinking about their recent bankruptcy. It reminded me of the time I went to Rite Aid looking for a very specific deodorant that I love that had been cruelly discontinued at Albertsons. 

I walked into the store and the shelves were bare, I didn't find the deodorant and I asked the teller what was going on. He said the company was filing bankruptcy, they had not received their next shipment, and they weren’t sure if the store would be open next week.

What a wild feeling it must have been as an employee; working at a place and watching it slowly unravel—showing up each day not knowing if you’ll have a job on Monday. That’s a kind of corporate existential crisis I wouldn’t wish on anyone.

Since then, I started paying closer attention to bankruptcies (the first horseman of the apocalypse?). The list of big businesses going under keeps growing: JC Penney, Rite Aid, Liberated Brands (so long to Quiksilver, Billabong, and Volcom), Party City, The Container Store… and those are just the ones I randomly noticed.

Then I came across a really interesting report recently published by Cornerstone Research (big fancy research firm), and let me tell you, it confirmed that I wasn’t just imagining things. Here’s a highlight:

“In the last 12 months, 113 companies with over $100 million in assets filed for Chapter 7 or Chapter 11 bankruptcy, compared to 105 in the previous year, and well above the historical annual average of 79.2 between 2005 and 2023.”

And another:

“In the last 12 months, there were 24 mega bankruptcies (companies with over $1 billion in reported assets), a slight decrease from 28 in the previous year, but still higher than the historical annual average of 22.5.”

And a graph is worth a thousand words:

Mega bankruptcies. That’s a real category. And WeWork led the charge with $15.5 billion in assets at the time of its bankruptcy. (Related to this bankruptcy topic I also know of many large businesses with major quarter over quarter losses. But that’s another subject.)

Here’s what I do know; that day in the mall, watching all the shoppers shuffle in and out of JC Penney, I couldn’t help but think this is the inevitable fallout of our relentless consumption. The companies that once shaped entire industries are now running on fumes, desperately trying to maintain store footprints and pumping out product pipelines so quickly that there was no way they could be resilient in times of economic downturn.

Retail, especially the legacy brands, was built on a model that assumed infinite expansion—more stores, more products, more customers, forever. But infinity has a limit.

We’ve got to slow down. In times of economic prosperity companies get ants in their pants, clawing at more profits, sucking us consumers in with bigger and better.

Was this collapse inevitable, even without inflation, supply chain meltdowns, and the lingering pandemic hangover? Maybe the writing was on the wall long before interest rates started climbing. Taking a look at the graph, did we not learn lessons from the 2008 bubble? The foundation was already cracking under the weight of excessive consumption and a business model that never accounted for an economy that could contract.

But back to things I don’t know. I’m not done exploring Ideas that are too big for my britches…

Here’s where I see things get even weirder (the second horseman of the apocalypse). While companies are crumbling, banks are in the middle of their own identity crisis.

JPMorgan Chase recently reshuffled its executive team, announcing “new responsibilities for several senior executives as it continues to build on its leadership positions across global financial services.” CitiBank, fresh off a major reorganization, promoted 344 managing directors while simultaneously planning more layoffs, and changing heads of global assets. HSBC is also “simplifying” (which, in corporate-speak, usually means cutting jobs), with its CEO stating “While we are introducing these changes at pace, the process has been measured, thoughtful and fair” (translation: we did this pretty quick but we think we know what we’re doing).

And the third gear that’s also been an interesting follow is the CEO turnover rate (the third horseman of the apocalypse). Harvard Law just published a report showing that the S&P 500 had 58 CEO departures in 2024—a 21% increase from last year. That’s the second-highest CEO turnover in recorded history, even surpassing pandemic-era uncertainty.

This doesn’t even touch on the changing era of global politics (the fourth horsemen?) pulling the rug out from under us all. Global, meaning this swing isn't something just happening in the US. 

Some will argue this has nothing to do with the current administration—that the cracks started forming much earlier, maybe even back in 2020, and we’re just now seeing the fallout. Others will say we’re only at the beginning of the mess, and the real challenge for leadership (in government and business) is just getting started. 

From my perspective it is a real trifecta of a force. All the while “ice capes melting, meteors becoming crashed into us, the ozone layer leaving, and the sun exploding—we're definitely going to blow ourselves up.”

Either way, it’s clear that something big is shifting and we’re all just here, watching it unfold while trying to buy deodorant.

Maybe this is all way above my head. Maybe it’s just noise. But these trends are worth paying attention to.

And only time will tell where this all lands.