An interesting article has appeared via the Wall Street Journal. It suggests that 13.5% of the retailers covered by Moody’s Investor Service currently have debt ratings that indicate that they are at a very high risk of going bankrupt or entering bankrupt protection.
The article highlights that going bankrupt doesn’t necessarily mean a store will close, however, it makes it more likely. Especially if the brand isn’t able to restructure their debt position.
Here are some of the surprising retailers that the article says could potentially go bankrupt in 2017. The article highlights many retailers that aren’t’ featured on the list. The retailers featured here have an active Canadian presence.
Claire’s Stores: Claire’s is known for their chain of accessory stores. Marketed to tweens and early teens, Claire’s is facing immense competition from online retailers.
Gymboree: Gymboree’s high priced kids clothing is not of interest anymore to new parents. Consumers have begun to shop online and elsewhere for affordable children’s clothing. Gymboree has struggled as a result.
David’s Bridal: With their CEO’s resignation, David Bridal has been struggling. The WSJ article states that Moody’s shifted David’s Bridal’s outlook from stable to negative.
J.Crew: The preppy retailer that made a splash in Canada a few years back has been struggling. The brand’s perception as a high-priced outlet mixed with some company errors gives J.Crew a bleak outlook, not to mention the President is leaving the company.
Sears: While it’s not really a surprise, most retailer insiders think that Sears will go belly up in the near future.
True Religion: With a few stores in Canada, True Religion could go under. They have been forced to explore debt restructuring so we will see what happens in the future.