Nearly half of the major retailers that filed for bankruptcy protection over the past 15 years eventually shuttered all of their stores, Fitch Ratings found in a report.
Of 55 retail and supermarket bankruptcies, 25 were liquidated, the report showed.
Meanwhile, bankruptcies among all U.S. companies led to liquidation just 13 percent of the time, according to the Wall Street Journal, which covered the Fitch research.
Brick-and-mortar stores are facing mounting challenges from online retailers and changing consumer behavior. Fitch also found that retailers are struggling with high debt loads, leases and interest payments, the Journal reported.
Major retailers that have liquidated and shuttered — or will shutter — all of their locations include Toys ‘R’ Us, discount shoe store Payless and high-end department store Barneys New York.
Fitch is watching nine retailers that it believes are at risk of bankruptcy or default on loans or bonds: J.C. Penney, Fresh Market, J. Crew, Fairway Market — which filed for Chapter 11 bankruptcy protection Thursday — Serta Simmons Bedding and Ann Taylor parent Ascena Retail Group, according to the Journal.
Fairway’s filing came a day after the supermarket chain disputed a report in the New York Post that it was filing for Chapter 7 bankruptcy and preparing to close all 14 of its stores. Chapter 7 bankruptcy signals a company is dissolving, while Chapter 11 allows a company to shed debts and restructure.
Fairway said it has a stalking horse bid from Village Super Market to buy up to five of its New York City supermarkets and Fairway’s distribution center for $70 million.
Other major retailers that announced plans to close scores of stores this month are clothing store Express and home goods chain Pier 1 Imports. Express this week said it will close 100 stores by 2022, and greeting-card store Papyrus said 254 stores will go dark. Pier 1 is shuttering 450 locations. [WSJ] — Mary Diduch