More retailers are on verge of bankruptcy than at height of Great Depression

This is shocking.

According to Moody’s, the rating giant, 22 retailers are on the verge of bankruptcy — a number that’s greater than the 19 distressed retailers at the peak of the Great Depression in the 1930s. Also troublesome is the fact that the 22 retailers span the range from the luxury high-end (Neiman Marcus) to discount stores (99 Cents).

Kevin McCoy reports for USA Today, June 9, 2017, that senior Moody’s retail analyst Charles O’Shea calls consumers’ major shift to online shopping a “perfect storm” for brick-and-mortar stores.

A retailer’s inclusion in Moody’s list of distressed companies is based on an analysis of its financial liquidity, ability to manage maturing debt by refinancing, credit profiles, competition challenges, ownership, and management structure. Those that rank low in multiple categories were given Caa ratings, which O’Shea calls “deep junk.” He said, “When you’re down there in C-a land, bankruptcy is a real possibility.”

However, O’Shea said there are companies tagged with a Caa rating by Moody’s which come out of “deep junk” if their liquidity, debt management or other financial metrics improve. An example is J.C. Penney that, as O’Shea put it, “was down there, and is now out,” with an improved rating.

Here are the 22 retailers that are on the verge of bankruptcy, being rated Caa or lower by Moody’s:

  1. 99 Cents Only Stores – discount retailer
  2. Boardriders SA  – sporting subsidiary of Quiksilver
  3. The Bon-Ton Stores – parent of department store chain
  4. Charlotte Russe – women’s clothing
  5. Charming Charlie – women’s jewelry and accessories
  6. Claire’s Stores – accessories and jewelry
  7. Cole Haan footwear (Calceus Acquisition)
  8. David’s Bridal – wedding dresses and formal wear
  9. Fairway Group Holdings – food retailer
  10. Eddie Bauer (Everest Holdings)
  11. Gymboree – children’s apparel
  12. J. Crew Group (Chinos Intermediate Holdings)
  13. Neiman Marcus Group – luxury department store
  14. Nine West Holdings – clothing, shoes and accessories
  15. Savers (Evergreen AcqCo 1 LP) – thrift chain
  16. Sears and Kmart (Sears Holdings)
  17. TOMS Shoes – footwear company
  18. Tops Holding II – supermarket operator
  19. Totes Isotoner (Indra Holdings)
  20. True Religion Apparel – men’s and women’s clothing
  21. Velocity Pooling Vehicle – does business as MAG, Motorsport Aftermarket Group
  22. Vince LLC – clothing retailer

Although the at-risk retailers comprise 16% of America’s total retailers, the worst could be yet to come. Moody’s says the ranks of distressed firms and retail sector defaults are likely to grow during the next 12 to 18 months.

No wonder a recent study found that financially-secure retirees are “hoarding” and not spending, but actually keep saving, because they fear the unknown. Reports of a retail apocalypse certainly don’t help.

Update (June 16):

According to BankruptcyData.com, more than 300 U.S. retailers have already filed for bankruptcy so far this year — up 31% from the same time last year. Most of those filings were for small Mom & Pop stores with a single location, but the filings also include big chain stores such as Gymboree.

A new report out this week from Credit Suisse says between 20% and 25%, or as much as a quarter of American malls will close within five years, which will be unprecedented in U.S. history and will hollow out cities and suburbs. (Source) H/t FOTM‘s CP

~Eowyn

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40 responses to “More retailers are on verge of bankruptcy than at height of Great Depression

  1. Many factors play into this happening . . . back in the 1940-1950’s many shopped from catalogs . . . then along came the wonderful “shopping malls,” many of which were so huge that a person needing to stop at different stores got fatigued from lugging packages to and fro, and then back to the car. Then we see that riding public transportation to go shopping really isn’t particularly safe (i.e. the fatal stabbings at the Portland, OR Hollywood Metro bus transfer station,) there have also been 2-3 shooting incidents at least in Portland involving Shopping Malls, I recall both Lloyd Center as a problem, probably because it boarders some of the worse areas of town, but then we had a shooting out at Clackamas Town Center, which includes some very well to do areas. Then along comes “internet shopping,” no traveling from store to store to pick out just what you want, no having to drive somewhere, no having to use public restrooms (and whatever weirdos may lurk there, no risk of shooters (unless that is a problem in your own neighborhood) . . . you purchase what you want, and in many cases, you can get delivery in two days, such as with Amazon Prime. Brick & mortar stores evidently thought that people would always come to their places of business, but more and more of us have reverted to that same practice of “ordering out of a catalog” just like our parents did, the only thing is we use a computer to accomplish this task. I for one love being able to order online . . . I received one package yesterday from Amazon, and am expecting another today, and one tomorrow. I don’t know how life could get any easier!!!

    I feel for those whose livelihoods are imperiled by this change in buying habits, but things change, and they always will.

    Liked by 4 people

    • I’m trying to curtail buying from Amazon, after all, they are for censorship. They pulled the book “Nobody Died At Sandy Hook”. I try to patronize places that are not the monolithic colossal in retail like walmart, amazon, starbucks, etc etc etc. I go with buy local. Though, I don’t live in the city anymore either! That was an experience….wooh.

      Liked by 3 people

    • Auntie, you hit upon several great points. I too, am guilty of taking the easy way out and for safety and time saving. I’m trying to wean myself from Amazon because of all their evil doings, but heck, most of them are guilty also. It has become hard to keep track of whose who in decent retailers. And most people don’t care that many items were last seasons.
      I think people have opted for a more casual way of dressing and unless you are high society and attend several social events, I think those people have also chosen an easy and cheaper way of living. I think the high costs are killing the big luxury stores. Even the rich take advantage and a chance to save.
      I will miss Sears, they had great appliances and tools and a lot of their clothes were quite decent at a fair price.
      Over the years we have lost so many quality stores in favor of cheaper prices that profit China. The US has suffered greatly.
      I remember when young it was all about Made in Japan or Korea, China wasn’t even on the horizon. China has recently taken advantage of all that has been given to them and profited nicely. Can’t blame them, but the treatment of the poor is disturbing.

      Liked by 1 person

  2. Next up, blockchain that promise to eliminate a majority of all clerical and non-officer management positions in financial and legal services.

    Liked by 1 person

  3. Why retirees are nervous?
    No it should be “Why retirees have survived to be retirees”.

    We are not stupid. We do not wish to take our lives in our hands to buy a fidget spinner.
    Gee who would have thunk.
    Brick and mortar are drying up with better prices, free shipping and no sales tax on line.

    We go to Sam’s, Walmart, Lowes, Home Depot and selected supermarkets, where we feel relatively safe and which are regularly patrolled.

    Retail has been on the decline for decades, although there are a few great shopping zones, there aren’t many. And all the large retailers are tastelessly uber Liberal seeming to cater to all the different species of ‘trans-‘ stalking the planet.

    When I only need to go to the bank once every six months, why would I expect them to be on every corner and open 9 to 5? They’ve been replaced by drug stores with ATMs.
    Someone is taking lots of drugs, and needs cash to buy them apparently.

    Sometimes there are walmartians roaming around Walmart that make me cover the grandkids’ eyes, but they (the walmartians) have yet to attack.
    I’m ready to drop them like a sack of crap.
    I’ve been bumped by a big fat ass a few times, but they’re handicapped, right?
    No parking lots after dark, (did I mention I am armed?)

    Add to that the fact that the streets and malls are war zones and freak shows, restaurant employees are pigs and hate us; why go if you do not have to?

    Liked by 2 people

    • I worked at Hellmart and I will never buy a single thing from that Hellish company ever again. Out of the numerous jobs I have worked, they are the top two worst of all I ever had to deal with (and I was a rent a cop as well as in the service). Shopping at wallyworld is like flushing your money down the toilet straight to China.

      Liked by 2 people

  4. Too bad I don’t see Wallyworld on that list. This is partly their fault for being the giant for importing Chinese crap. When I worked at that Godforsaken hell hole of a company, just about everything I unpacked (when I was shifted to the toy department), 99.9 percent of all the toys were….Made In China. Who has money for all that crap now? You buy it and it breaks!
    Even the crappy garbage ‘big name’ autoparts stores sell Chinese JUNK, you can hardly even find brake parts that are made in the USA, you have to search online to get them, and even if the person on the phone assures you that they’re made in USA, you get them and guess what- they’re made in CHINA. And, they do NOT last! Chinese made stuff is just plain GARBAGE! We do without buying a lot because we don’t want to buy crap that will break, then you throw it out and it ends up in the ocean choking sea creatures!

    Liked by 2 people

    • You can lay much of the blame for “Chinese crap” at the foot of labor unions.

      Ridiculously high wages and benefit demands are one of the primary reasons manufacturing has been driven offshore.

      Liked by 1 person

      • Don’t forget, Walmart doesn’t have unions, and Walmart built large factories in China years ago. The labor unions for retail workers are a joke, I was forced into one during my school days when I was working and going to school. Sending all the manufacturing from the USA overseas to China was another giant death knell for this country. I remember reading in the stupid liberal paper that some economist said (back in the 2000’s) that a service economy was a good one. Yeah, right.

        Liked by 1 person

        • Manufacturing would not have left if wages and benefits were not driven through the roof.

          Walmart would build in your backyard if regulations were not onerous and wages were relatively competitive.

          This is the same for almost all of the other companies who invest outside of the USA.

          Liked by 1 person

    • Sam Walton had ties to the military intelligence services. Wal-Mart has current ties to DHS. Some retailers are more equal than others. This is what Wiki is willing to tell us. I suggest reading between the lines. [Caps are mine.]

      “Samuel Moore Walton was born to Thomas Gibson Walton and Nancy Lee, in Kingfisher, Oklahoma. He lived there with his parents on their farm until 1923. However, farming did not provide enough money to raise a family, and Thomas Walton went into FARM MORTGAGING. He worked for HIS BROTHER’S Walton Mortgage Company, which was an agent for Metropolitan Life Insurance,[3][4] where he foreclosed on farms during the Great Depression.[5] ”
      “He and his family (now with another son, James, born in 1921) moved from Oklahoma. They moved from one small town to another for several years.
      [Frequent moves often indicates ‘government’ work.]

      “After high school, Walton decided to attend college, hoping to find a better way to help support his family. He attended the University of Missouri as an ROTC cadet. ….
      “He was also tapped by QEBH, the well-known secret society on campus honoring the top senior men, and the national military honor society Scabbard and Blade.”

      “Walton joined J. C. Penney as a management trainee in Des Moines, Iowa,[10] three days after graduating from college.[8] This position paid him $75 a month. Walton spent approximately 18 MONTHS with J. C. Penney.[11] He resigned in 1942 in ANTICIPATION of being inducted into the military for service in World War II.[8] In the MEANTIME, he worked at a DuPont MUNITIONS plant near Tulsa, Oklahoma. Soon afterwards, Walton joined the military in the U.S. ARMY INTELLIGENCE Corps, supervising security at aircraft plants and PRISONER OF WAR CAMPS. In this position he served at Fort Douglas in Salt Lake City, Utah. He eventually reached the rank of captain.
      I didn’t know we had prisoner of war camps in Utah, a Mormon and therefore, a freemasonic stronghold.]

      I suggest you read the rest of the wiki entry with a skeptic’s eye. There is a lot more to Wal-Mart than stocking Chinese stuff on their shelves. Consider that Wal-Mart was started in Arkansas (home of Mena, Arkansas, that famously little airport where the CIA ran part of its drug operations back in the good old days of Iran-Contra.)

      Walmart has a direct link to the DHS (and G4S) and Hillary Clinton was on the Board of Directors back in her Rose Law Firm Arkansas days, because, you know, you can never have enough mooolah.

      Liked by 1 person

  5. One of the differences between today and the great depression would be the EBT card. Today your unemployed or under employed neighbor goes to the store and purchases items with a government issued debit card. During the depression you would see the same person in the line at the soup kitchen.

    Liked by 1 person

    • And they kept the illusion that our economy was ‘okay’ because of no lines. It’s all BS and that is why the majority voted for Trump, because all these other presidents have been helping to destroy the country and the wealth you get from manufacturing real products like steel.

      Liked by 1 person

      • chemtrailssuck . . . You are right on the money! Just keep the people calm, and continue many will just ignore what everyone should be able to see around them.

        Like

  6. I would say I agree with just about everything other’s have noted as above . . . regarding moving production out of the USA. No one brought up the fact that our taxes lead the world. But then, I suppose you have to have high taxes to support all those who are too inconvenienced to go out and work a job. We need several things . . . bring the jobs home, get people off welfare, but I’m afraid individuals will still have the choice as to whether they want to shop in a brick & mortor store or from a catalog (paper catalog, or online.)

    Like

  7. There will ALWAYS be a need,and market, for Brick-n-Mortar Stores,because there will ALWAYS be people who need something “Right Frickin’ NOW”,not a few days later.(I’m a Charter Member of that group.)

    Liked by 2 people

    • I’ll tell you what’s ALWAYS needed and succeeds: small well-stocked old-time real hardware stores. No, they don’t have appliance sales and there are no plastic gnomes or other gimcrack BS that’s a curse on the Creation. Good riddance to that rubbish, pre-made & hot from the factory in China or Akron, Ohio: it’s all crapola from the get-go!

      Liked by 1 person

      • Joseph . . . that is such an excellent observation! I remember the days of R-E-A-L hardware stores, then they disappeared, and you get hardware stores selling anything from nails to toilet tissue.

        Like

  8. It all makes sense but, here in southern California, I find it hard to imagine that 99cent Only stores can be in financial trouble.

    Liked by 1 person

  9. All this immmense, planet-wide evil caused by deliberate scarcity on the part of international bankers, and their private reserve bank schemes, all conjured over the past 400 plus years!

    The US ceased as a Constitutional Republic when it allowed the Fed Res Bunco –I mean, Bank– to come into existence a few days before Christmas 1913 –how Satanic is their timing!– and surrender the Constitutional sovereignty of its monetary power, so that it could first ‘finance’ the house of Morgan’s loans, then enter WW1.

    Of course the cabal uses its age-old tactic of ‘divide and conquer’ to be sure the have-nots fight amongst themselves for what few scraps fall from the Golden Bowls of the elites… and We the Sheeple fall for it every time! Beautiful in its Satanic perfection, isn’t it?

    Read the comments here, see how even though many comprehend part of this evil, few can resist blaming another, for all have sinned in our lust for what we see as our minimum in life! Yes, even as I, but no longer, as I’ve been levelled by that evil, but I’m free of it at last.

    Liked by 1 person

    • I keep trying to tell people that it isn’t that “the rich” want more. It’s that “the rich” do not want anyone else having any. It is about control. If you must have “money” to purchase necessities and desirable things, those who control the “money” control the World.

      As long as people argue about “competition”, etc., they’re missing the point. It is all enslavement. “Trickle down economics” doesn’t work because there is nothing the rich hate worse than a leak.

      What they least want is for people to have the means to control their own destinies. So long as the medium of exchange can be controlled, they are in control.

      Liked by 1 person

  10. Part of the problem in retail shopping is finding a clerk that can help you, finding a clerk that will help you, or finding a clerk at all. I’m SICK of having to check myself out at stores when I’m finished shopping and just want to quickly move through the checkout line and drive home again… Not once have I ever been PAID to check myself out at a store…

    Liked by 1 person

    • This is why I don’t wear anything that has an outward corporate logo on it. As my father used to say, “How much are you being paid to advertise for them?”

      Liked by 2 people

      • My father had the same attitude re clothing. He adamantly refused to pay “brand name prices” when we were teenagers. So I never got into the habit as other women I later knew, who had to have the Gucci this & Gucci that. I consider it a blessing to having NEVER CARED about such things. 😉

        Like

      • And of course, you actually pay more for logo-branded clothing… I remember when Izod was big. I ignored it completely. :~)

        Like

    • When I was younger, clerks were TOO eager to help, almost annoying. These days, I think they pay them to NOT help shoppers!

      Liked by 1 person

      • Yeah, I remember a trip to Staples right after a visit with the dentist, while the Novocaine was wearing off — when I just wanted to browse the electronics section. And a clerk just kept asking me if he could help me find something, and I was shaking my head repeatedly, unable to speak due to numbness in my mouth. And that was probably no more than 10-15y ago. But even then, I suspect that was a specific store policy, maybe due to the manager.

        Like

  11. 2017 Is Going To Be The Worst Retail Apocalypse In U.S. History – More Than 300 Retailers Have Already Filed For Bankruptcy

    http://theeconomiccollapseblog.com/archives/2017-is-going-to-be-the-worst-retail-apocalypse-in-u-s-history-more-than-300-retailers-have-already-filed-for-bankruptcy

    Liked by 1 person

  12. Out of 22, I’ve only heard of 5 of those stores, but then I’m not big on shopping. It’s more of a pain than a pleasure. I’m sick of the “hunting” aspect of it, even online.

    The problem with online shopping is you can’t see/touch the item which is not always what it “appears” to be in the photos, or the descriptions are so lousy, you can’t tell if it’s really what you’re looking for.

    It’s bad, though, when brick+mortar businesses cannot stay afloat. I don’t think it’s a good sign at all. I’m guessing the “powers that be” would like nothing more than for everyone to shop online… People staying home more, right where they want us in their Agenda 2030 dream of “cramped cubicle” lifestyles for the masses.

    Like

  13. Some good news:

    6/15/17: “More Liberal Media Dying – Far Left Huffington Post Lays Off Dozens Of Employees”:
    http://americanlookout.com/more-liberal-media-dying-far-left-huffington-post-lays-off-dozens-of-employees/

    Like

  14. We are all gov-co workers now….those of us who are still employed, that is.

    Like

  15. We’ve lost so much dignity in life. When I was young people who worked in stores knew quite a lot about whatever they were selling. They treated their customers like royalty. Shopping was a pleasant experience. Expensive purchases were expected to take time and thought and usually weren’t completed on the first visit.

    Later, I saw the same thing in Europe. Being a merchant had ritual involved with it. There was mutual respect and consideration. There was also dignity for those that worked in shops.

    With the advent of “malls”, the “box stores” arrived. These were little more than warehouses peopled by minimum wage employees who knew nothing of what they were selling. The expectation became much lower. These were simply the outlets one visited to buy cheap Chinese junk.

    Now we can buy our cheap Chinese crap on the internet (with accompanying outrageous shipping charge). Some will pay the shipping charge as, the cost of “sales personnel” and buildings are avoided.

    These developments are all engineered. They did not happen by accident. Just like the automated check outs, that allow you to work for free. There is only one cure for this. Stop buying anything from them.

    They are conditioning us to work for nothing and take abuse to buy junk. Unless we want that in our future we must find other ways to get what we want without allowing them to set the agenda.

    Let them close. If they can’t recoup via the internet, they’ll give it a rethink. Stop buying junk. Insist on quality or don’t buy. At the present state of merchandising, we are not losing a thing by these China outlets going under.

    They will either do what’s necessary to stay in business or they won’t. Somebody will step into the breach and sell quality merchandise.

    Like

  16. Amazon’s done it to books, electronics and clothing. Now it wants to rule the grocery aisles…

    Grocery Stocks Crash After Amazon Buys Whole Foods

    http://www.zerohedge.com/news/2017-06-16/amazon-buy-whole-foods

    The Winners and Losers in Amazon’s Deal to Buy Whole Foods

    https://www.eater.com/2017/6/16/15816754/amazon-whole-foods-instacart-grocery-stores-stocks

    Like

  17. Pingback: More retailers are on verge of bankruptcy than at height of Great Depression — Fellowship of the Minds | Bankruptcy Attorney alexandria va

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