CNBC: Retail's New Wave of Bankruptcies

CNBC headline: The retail industry is facing a potential wave of bankruptcies – here’s why


Including Revlon’s $REV filing, there have been just four retail bankruptcies so far this year, according to S&P Global Market Intelligence. That’s the lowest number the firm has tracked in at least 12 years.

It’s not exactly clear when that tally could begin to grow, but restructuring experts say they’re preparing for more trouble across the industry as the all-important holiday season approaches.

An analysis by Fitch Ratings shows that the consumer and retail companies most in danger of default include mattress maker Serta Simmons, cosmetics line Anastasia Beverly Hills, skin-care marketing company Rodan & Fields, Billabong owner Boardriders, men’s suit chain Men’s Wearhouse, supplements marketing company Isagenix International and sportswear manufacturer Outerstuff.

The latest retail sales data shows where consumers are pulling back the most. Advance retail and food service spending fell 0.3% in May versus the prior month, the Commerce Department reported last week. Furniture and home furnishings retailers, electronics and appliances stores, and health- and personal-care chains all saw month-over-month declines.


In the first three months of 2022, consumers bought 6% fewer items at retail than they did in the first quarter of 2021, NPD Group said in a survey issued in late May. More than 8 in 10 U.S consumers said they planned to make further changes to pull back on their spending in the next three to six months, it said.

And then there’s this about corporate debt which Grantham and El Erian have been warning us about:

Riveron’s Ware said businesses had been racing to get in front of future rate increases. Some bought back debt or attempted to push out maturities. For example, department store chain Macy’s in March said it completed refinancing $850 million in bonds that were coming due in the next two years.

More recently, however, Ware said he’s noticed that refinancing activity over the past 12 months has begun to slow, with a bigger number of deals getting canceled or pulled. “It seems the window is closing for more difficult refinancing,” Ware said.