Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By silveristhenew (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

“It’s A Perfect Storm”: List Of Retailers In Danger Of Bankruptcy Hits Record 22

% of readers think this story is Fact. Add your two cents.


The US retail sector continues to sink at an alarming rate, and according to the latest iteration of Moody‘s list of retailers who are in danger of filing for bankruptcy, there are now 22 distressed retailers whose troubled financials the rating agency believes could make them potential bankruptcy candidates in the near future, up substantially from just two months ago, and topping the 19 recorded at the peak of the Great Recession.

According to Moody’s analyst Charles O’Shea, legacy retailers such as Sears, Neiman Marcus and others on the rating agency’s retail distress list, face a “perfect storm” and warned that “you’re on the Andrea Gail right now, and the water’s starting to get very choppy.” The worst could be yet to come as the Moody’s analyst writes that “the ranks of distressed retailers is set to keep growing over the next 12 to 18 months amid a secular shift in the industry.”

Moody’s list consists of all retailers which have ratings of Caa or lower. That number has grown to 22, or approximately 15%, of the firm’s retail and apparel universe. “When you’re down there in C-a land, bankruptcy is a real possibility,” O’Shea said.

“The majority of retailers remain fundamentally healthy,” said O’Shea, “But as select groups of retailers continue to deteriorate — in particular department stores and specialty retailers — we believe the distressed ranks will keep growing, fueled in part by distinct vulnerabilities within the B2/B3 retail population.”

Focusing on those retailers with imminent default risk, Moody’s adds that of 42 B2/B3 rated issuers (as of April 30, 2017), seven face $1.1 billion of maturities for asset-based loans and revolving credit facilities over the next year- elevating the risk of default for already-stressed and distressed issuers should the strong refinancing pace driving recent high-yield issuance recede. Such a risk is underscored by Moody’s US speculative-grade default forecast, which predicts a decline in the overall US speculative-grade default rate to 3% by April 2018 from 4.5% today, even as spec-grade retail and apparel default forecasts trend significantly higher, at 6.7% and 6.8%, respectively.

Some of the highliights from the latest Moody’s report

  • Competitive challenges are intensifying and the credit erosion among more challenged retail sectors and individual retailers is crystallizing rapidly as more issuers file for bankruptcy and miss payments
  • The competitive challenges weighing on earnings performance for bigger retailers like Amazon.com, Walmart Stores, Best Buy and Target will have potentially devastating ripple effects for smaller, more challenged retailers over the next several quarters
  • Common characteristics of retail and apparel companies with lower credit ratings include stressed liquidity, weak quantitative credit profiles, challenged competitive positions, sponsor ownership and erratic management structure
  • Liquidity is typically the driving force in the assessment of credit risk, and a key determinant in any drop into Caa/Ca territory. “Risk becomes more acute when a company is facing a meaningful debt maturity.”

Some names that figured previously on Moody’s list have already filed for Chapter 11 protoection: among them discount footwear company Payless ShoeSource and Rue21, a teen fashion retailer, both filed for bankruptcy recently, while Gymboree, a specialty seller of children’s apparel, missed its June 1 interest payment and is expected to announce its bankruptcy filing shortly.

While landing on the distressed list of “super fallen angels” is not a death sentence, recently JC Penney managed to crawl out of it, the probability that a company will end up in bankruptcy rather than get its financial in orders is orders of magnitude greater.  “There are companies that come out of that,” said O’Shea, who noted that iconic retailer J.C. Penney “was down there, and is now out,” with an improved rating.

Doing the math here, with one company “out” and everyone else eventually filing, restructuring lawyers are finally going to be busy after a nearly decade-long hiatus.

Below is the full list of deeply distressed retailers:

  • Boardriders SA  – sporting subsidiary of Quiksilver
  • The Bon-Ton Stores – parent of department store chain
  • Fairway Group Holdings – food retailer
  • Tops Holding II – supermarket operator
  • 99 Cents Only Stores – discount retailer
  • TOMS Shoes – footwear company
  • David’s Bridal – wedding dresses and formalwear seller
  • Evergreen AcqCo 1 LP – parent of thrift chain Savers
  • Charming Charlie – women’s jewelry and accessories
  • Vince LLC – clothing retailer
  • Calceus Acquisition – owner of Cole Haan footwear firm
  • Charlotte Russe – women’s clothing
  • Neiman Marcus Group – luxury department store
  • Sears Holdings – owner of Sears and Kmart.
  • Indra Holdings – holding company owner of Totes Isotoner
  • Velocity Pooling Vehicle – does business as MAG, Motorsport Aftermarket Group
  • Chinos Intermediate Holdings – parent of J. Crew Group
  • Everest Holdings – manages Eddie Bauer brand
  • Nine West Holdings – clothing, shoes and accessories
  • Claire’s Stores – accessories and jewelry
  • True Religion Apparel – men’s and women’s clothing
  • Gymboree – children’s apparel


Source: http://silveristhenew.com/2017/06/09/its-a-perfect-storm-list-of-retailers-in-danger-of-bankruptcy-hits-record-22/


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.