Obviously, 2018 has already been a tough year for retail with Toys R Us, Sam’s Club, Macy’s, Sears, Bon-Ton and others all announcing new rounds closures in a new year that’s only one month old.
As the retail industry continues ailing — led by more shoppers looking for deals online and shopping at off-price chains — we’re gearing up for a year chock full of expected bankruptcies.
Here’s a look at who’s likely to turn up in bankruptcy court in 2018, according to S&P Global Market Intelligence.
15 stores on the brink of bankruptcy
|STORE||PROBABILITY OF DEFAULT IN 2018|
|Sun Pacific Holding Corp. (formerly EXOlifestyle)||44.38%|
|Sears Holding Corp. (Sears and Kmart)||25.37%|
|Vince Holding Corp.||17.94%|
|Bon-Ton Stores Inc.||12.74%|
|Bebe Stores Inc.||10.17%|
|Destination Maternity Corp.||9.34%|
|Destination XL Group Inc. (big and tall men’s apparel)||8.78%|
|Stein Mart Inc.||8.24%|
|Christopher & Banks Corp.||8.04%|
|Sears Hometown and Outlet Stores Inc. (Sears Outlet)||7.23%|
|DGSE Cos Inc. (Dallas Gold and Silver Exchange)||6.50%|
|Burlington Stores Inc.||5.96%|
|Tailored Brands Inc. (Men’s Wearhouse, Joseph A. Bank)||5.69%|
|Clarus Corp. (formerly known as Black Diamond)||5.36%|
Some names on this list like Sears Holding Corp. and Bebe Stores announced store closures in 2017. Other names — such as Sun Pacific, Razer and Clarus — are manufacturers first and have a small retail footprint that’s almost an afterthought.
Both no matter which camp they fall into, all these retailers face the same core problems.
Those troubles include declining store traffic, liquidity issues, management challenges, weakened competitive positions, ailing credit ratings, exposure to unfavorable borrowing terms, highly promotional pricing that cuts into margins and supply chain interruptions.
That final factor is particularly distressing for those stores that are fast-fashion retailers. Such retailers live and die by being able to get the hottest trends into stores as quickly as possible.