22 Retailers That Are at Serious Risk of Bankruptcy
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Things just seem to keep getting worse for the troubled brick-and-mortar retail world.
After years of struggling to compete with all-powerful Amazon, retailers have been closing hundreds of stores amid declining sales. Analysts are even predicting that one-quarter of America's malls could close within the next five years.
And in at least one way, the situation is worse for retailers now than it was during the doldrums brought on by the financial crisis, a report released last week by Moody's Investors Service indicates. The new report gives ratings of Caa or worse—defined as "subject to very high credit risk"—to 22 major retailers.
That's up from 19 when a similar report was issued in February, and it tops the high (also 19) recorded during the Great Recession. (And indeed, one of the 22 filed for bankruptcy shortly after the report was released.)
Distressed retailers like Sears, David's Bridal, and Neiman Marcus are facing a "perfect storm," senior Moody's retail analyst Charles O'Shea explained to USA Today, referencing the title of the famous Sebastian Junger book (and subsequent movie). "You're on the Andrea Gail right now, and the water's starting to get very choppy."
Spoiler alert: No one on the ship survived.
Today's retail storm centers on Amazon, and the widespread shift to online shopping in general. Still, Moody's notes that only 15% of the retailers it analyzes are currently at a high risk of bankruptcy. "The majority of retailers remain fundamentally healthy," O'Shea said in a press release accompanying the new Moody's report. "But as select groups of retailers continue to deteriorate—in particular department stores and specialty retailers—we believe the distressed ranks will keep growing."
Here are the 22 chains that Moody's says are at serious risk of bankruptcy.
The sports retailer is a subsidiary of the surf-inspired company Quiksilver, which itself emerged from bankruptcy in early 2016.
The department store company, based in Pennsylvania and Wisconsin, has reported big losses in recent years.
Calceus owns the Cole Haan footwear brand.
The apparel retailer includes its flagship women's clothing stores and the child-focused brand Peek.
The women's fashion accessories chain was launched in 2004.
Chinos Intermediate Holdings
It's the parent company for the preppy J. Crew brand.
The chain, focused on accessories and jewelry for young women, has been closing stores and losing money for years.
The bridal retail chain, once known as the "Walmart of weddings," has been categorized as distressed for several months.
It's the parent company of the well-known outdoorsy fashion brand Eddie Bauer.
Evergreen AcqCo 1 LP
It's the parent company of the for-profit thrift store chain Savers, which has over 300 locations in the U.S., Canada, and Australia.
Fairway Group Holdings
The grocery store chain went public in 2013 and has subsequently struggled as it expanded, entering bankruptcy protection for a few months last spring and summer.
Analysts have said for a while that the children's apparel retailer has on the brink of bankruptcy. Sure enough, on Monday, a few days after the new Moody's report, Gymboree filed for bankruptcy and announced it could
and anticipate it could close as many as 450 stores.
The luxury department store, which has gained attention lately for selling bizarrely overpriced pre-ruined apparel ($1,425 "destroyed" sneakers, $425 jeans covered in mud), recently put itself up for sale amid a sustained sales slump.
99 Cents Only Stores
The discount chain runs roughly 350 stores in the southwestern U.S.
Nine West Holdings
The firm owns its flagship women's shoe stores, and also owned the Easy Spirit footwear brand until it was sold off last year.
The company owns both Kmart and its iconic flagship retail brand, but could close over 250 stores this year.
The socially conscious footwear retailer, which donates a pair of shoes to charity for every pair purchased, had its debt rating downgraded last summer.
True Religion Apparel
The Los Angeles-based fashion retailer has been hit with slumping sales as premium-priced jeans have given way to trendy "athleisure" clothing.
Velocity Pooling Vehicle
The owner of MAG Retail, a seller of motorcycle parts and accessories, was downgraded by Moody's a year ago
Plus 3 More Chains
Indra Holdings. The holdings company owns Ohio-based Totes Isotoner, known for mostly for boots, gloves, and umbrellas.
Tops. The supermarket company has roughly 180 Tops Friendly Markets locations in New York, Vermont, Massachusetts, and Pennsylvania.
Vince. The luxury fashion retailer, which runs 40 full-price and 14 outlet stores, saw net sales decrease 14% during the first quarter of 2017.