01 Sep 2017

Trend Alert: 2017 is the Year of the Retail Bankruptcy

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If you follow current events, you are probably aware that many retailers have filed for bankruptcy in 2017, and more are on the way. In fact, the number of retailers that have filed this year has been so staggering that 2017 has been dubbed the “year of the retail bankruptcy.”

Learn more about what is fueling this trend, projected filers, and more below.

Inside the Trend

In late July 2017, news and research organization Reorg First Day reported that retail bankruptcies rose 110% in the first six months of 2017 compared with the same period a year ago. And, according to the ratings agency Fitch, the consumer discretionary sector has accounted for 24% of all bankruptcies this year.

It’s no secret that online shopping has taken the world by storm, and consumers are increasingly purchasing their wares online as opposed to brick-and-mortar stores. In addition, fully-online retailers such as Amazon have edged out brick-and-mortar retailers with cheaper prices, faster delivery, and the lower cost of exclusively operating online. This has been devastating for many companies, and projections show that the trend will only rise.

Among the highest profile retail bankruptcies were True Religion, a premium denim clothing chain, declaring liabilities of between $100 million and $600 million. Another high profile company to declare bankruptcy was kids’ retailer Gymboree, which declared liabilities of well over $1 billion.

Projected Filers

Even with so many retailers already having filed earlier this year, it is projected that even more are on the way. In June 2017, Fitch Ratings published a list of retailers considered to be at risk of default within the next 12 months, listed below:

  • Sears
  • Claire’s Stores Inc.
  • Nine West Holdings, Inc.
  • 99 Cent Stores, LLC
  • Crew Group Inc.
  • True Religion Apparel, Inc.
  • Charlotte Russe Inc.
  • Charming Charlie Inc.
  • NYDJ Apparels LLC
  • Vince LLC

Learn more about this trend here.