Macy's mechanics lien claims

The department store giant Macy’s is facing at least five mechanics liens totaling $114,973.29. These liens are rolling in amid the coronavirus pandemic, an event which has had a disastrous impact on the retail industry at large.

With a decline in foot traffic and a sharp uptick in online shopping, major retailers have reported some significant losses in past months. Macy’s sales fell by more than half in the first quarter of 2020, which equates to a loss of $3.6 billion. To put that into perspective, you can compare those losses to their profit of $136 million in shares this time last year.

As a response, Macy’s will be closing a total of 125 stores over the next three years and cut 2,000 corporate jobs along with several corporate offices, making the office in Manhattan its sole headquarters. On top of that, $4.5 billion was raised in financing to weather the storm that lies ahead.

The future holds no guarantees, but retailers like Macy’s are facing major financial struggles. Those struggles are impacting the construction industry as well.

Construction Contractors Bring Non-Payment Claims Against Macy’s

Alta Construction Inc. filed a lien against Macy’s property over unpaid construction invoices worth $36,198.10. It was filed in Riverside County, California on June 4th for a construction project at the Macy’s location at 40780 Winchester Rd. in Temecula.

Having worked three projects for Macy’s in the past at Century City, Rancho Cucamonga, and Santa Ana, Alta appears to have had a relatively stable relationship with the retail giant. This further highlights the impact that the pandemic has had on their finances.

Tepcon Construction Inc., a general contractor based in Tempe, Arizona, filed three mechanics lien claims for work completed between February and April 2020, nearing $30,000 in total. Each lien claim was filed in Maricopa County, Arizona.

Lee Scheffers Inc., a drywall contractor from Riverside, California filed a fifth lien against Macy’s on June 18, 2020, claiming a total of $49,626 in unpaid invoices.

Other Clothing Retailers Facing Mechanics Liens

Macy’s isn’t the only retail giant facing payment disputes with construction contractors. These recent liens are not only indicative of Macy’s financial troubles, but the financial troubles of the retail industry as a whole. It’s no surprise these troubles directly impact the construction industry.

Neiman Marcus is also facing two mechanics liens that total $16,878. The high-end department store had been facing cash problems before the pandemic; however, their problems have compounded in recent months, leading them to file for bankruptcy in June.

JCPenney was also named in a construction lien totaling $16,430.97 in Broward County, Florida. JCPenney filed for Chapter 11 bankruptcy protection in May and have since closed more than 150 stores.

Neiman Marcus and JC Penney were both highly criticized for paying millions in executive bonuses prior to filing for bankruptcy.

A mechanics lien totaling $57,233.59 was filed on property owned by J. Crew in Franklin County, OH. Since filing for bankruptcy protection in May, their 500 stores have closed, with some never to reopen.

Lucky Brand Dungarees wasn’t so lucky, either, as the apparel brand faces a mechanics lien for $2,450 in Broward County, FL. Lucky filed for bankruptcy protection in July and have since closed several locations.

Coronavirus Impact on Clothing Retailers

The retail industry is among the hardest hit during the coronavirus pandemic, and some experts say it was a long time coming. The rise of e-commerce and the falling popularity of malls contributed to some effect, but in the end, coronavirus has been the straw that broke the camel’s back.