Was This the Last Christmas for These Struggling Stores?
Parents, you might want to rethink your holiday shopping plans. Toys R Us has officially filed for Chapter 11 bankruptcy. The struggling chain has $400 million in debt due in 2018, and some vendors have been canceling shipments because they’re worried they won’t get paid, Bloomberg reported. The bankruptcy filing (which wouldn’t necessarily involve closing stores) will help the company address its debt problems and make sure there are toys on the shelves during the big end-of-year shopping season, according to CNBC.
The country’s biggest toy store chain isn’t the only retailer on shaky ground. Aerosoles and Vitamin World also filed for bankruptcy in September 2017. And in a challenging retail environment, dozens of other chains are fighting to stay afloat. In early 2017, 14% of retailers were distressed, according to Moody’s, the highest level since the Great Recession.
Here are 15 stores that could find themselves bankrupt by the new year.
Sears has been circling the drain for years. The chain has closed dozens of stores so far in 2017, and some vendors are reluctant to work with the company because they’re worried they won’t get paid if it goes under, Reuters reported. In March 2017, the company admitted that “substantial doubt exists related to [its] ability to continue as a going concern.”
Next: Sears’ sister store is also in trouble.
Kmart, which is also owned by Sears, is facing many of the same struggles as its sister company. In August 2017, the company announced 28 Kmart locations would close. That’s on top of dozens of closings earlier in 2017. Rivals Target and Walmart do a better job of connecting with customers, and surveys have found it usually doesn’t top the list of favorite places to shop.
Next: Sears isn’t the only struggling department store.
3. Neiman Marcus
Shoppers are turning up their noses at high-end department store Neiman Marcus. Sales have been down for seven straight quarters, Fortune reported, and shoppers are less loyal than they once were.
The company is also roughly $5 billion in debt and tried to sell itself earlier in 2017 but couldn’t find a willing buyer. Moody’s included it on its list of distressed retailers that are likely to seek bankruptcy protection. However, most of the company’s debt doesn’t come due until 2020, giving it time to turn things around. In the meantime, it’s closing 10 of its Last Call discount stores to focus more on its luxury offerings.
Next: Will this store’s customers get left at the altar?
4. David’s Bridal
Bad news for budget-conscious brides. David’s Bridal is also on Moody’s list of distressed stores that are likely to seek bankruptcy in the future. If a bankruptcy happens, hopefully customers will get more warning than they did when competitor Alfred Angelo went under in June 2017. Many brides who’d already paid for their dresses at that store were told they were out of luck after the company filed for Chapter 7 and shuttered all its retail locations.
Next: Tweens turn on a mall staple
If you have pierced ears, chances are you got them done at Claire’s. Staff at the mall chain have pierced 94 million ears over more than 60 years, according to The Washington Post, more than any other store in the country. But Claire’s is no longer the go-to place for tweens and teens in search of cheap costume jewelry. The company is $2 billion debt and is facing stiff competition from stores, such as Forever 21 and H&M, that sell similar merchandise. The company is “a complete trainwreck,” one analyst told the paper.
Next: Another mall staple on the brink
6. Charlotte Russe
Charlotte Russe is also on Moody’s list of retailers that could be poised for bankruptcy. The clothing store, like other chains on this list, has been hurt by declining foot traffic in malls and competition from fast-fashion retailers, such as Forever 21, noted The Motley Fool.
Next: Another struggling shoe store
7. Nine West
Payless and Aerosoles both filed for bankruptcy in 2017, and Nine West is also on the watch list. Early in 2017, Fitch Ratings said the shoe and accessories retailer was at risk of default. Loyalty data also suggests customers are shunning the chain’s brick-and-mortar stores, which could spell closings in the near future, CNBC reported.
Next: Can this dollar store survive?
8. 99 Cents Only
99 Cents Only stores also landed on Fitch Ratings’ list of troubled retailers. But unlike some of its counterparts, the bargain shopper’s paradise is staging a comeback. Execs have changed the way merchandise is displayed in the stores, which is boosting sales, Bloomberg reported, as well as reducing shoplifting.
Next: This company could be preparing for a bankruptcy filing.
9. Bon-Ton Stores
Bon-Ton Stores, which owns department stores chains Boston Store, Bon-Ton, Herberger’s and Younkers, could soon file for bankruptcy. The company has hired a restructuring firm to help it look for ways to restructure debt and possibly prepare for a bankruptcy filing, the Milwaukee Business Journal reported. The company has been closing six to eight stores a year and has been losing money for the past six years.
Next: Is this store the next Blockbuster?
“The next Blockbuster” is definitely not how you want to hear people describe your store. But that’s exactly what some people are saying about GameStop. A shift away from purchasing physical copies of games is hurting the chain, spooking investors. More than 100 GameStop stores closed earlier in 2017. A bankruptcy before the end of 2017 might not be likely, but the company’s long-term outlook isn’t great, at least in the eyes of some investors.
Next: A preppy favorite on the brink
11. J. Crew
J. Crew has lost its way. The store went from peddling preppy basics to trying to sell expensive, higher-end items, and shoppers weren’t interested. A new CEO took over in July 2017, and one of its lead designers has also left, Fortune reported. A recent deal reduced some of the company’s debt, but sales are still down. Competition among fashion retailers is stiff, and “J. Crew needs to figure out who its customer is” if it hopes to survive, noted Bloomberg’s Shelly Banjo.
Next: An innovative retailer shuts its doors.
You might not have heard of Pirch, but industry experts thought this company’s innovation could be the future of retail. The high-end appliance and kitchen retailer, which had a handful of stores across the country, focused on giving customers a chances to experience the products for sale by, for example, using a shower or trying out an outdoor kitchen. But in September 2017, the company announced it was closing most of its showrooms, though stores in California will remain open, Bloomberg reported.
Next: The forecast is dark for this outdoor clothing retailer.
13. Eddie Bauer
Outdoor clothing retailer Eddie Bauer is hundreds of millions of dollars in debt and is trying to find a buyer, so it can stay afloat, Reuters reported. Sales are down, and Moody’s included it on its list of troubled stores that could face bankruptcy.
Next: Even thrift stores aren’t immune from the retail apocalypse.
You’d think a store where the merchandise is donated could survive in even the toughest of retail environments, but think again. Thrift store chain Savers closed 4% of its more than 300 stores earlier in 2017, the Chicago Tribune reported. Moody’s included it on its list of retailers that could face bankruptcy in the near future.
Next: This company’s stores are out of fashion with shoppers.
15. Ann Taylor
Fashion is fickle, as Ascena Retail Group has discovered. The company owns chains, including Ann Taylor, Loft, Lane Bryant, and Dress Barn. And like many of its competitors, it’s struggling. Its stock price has fallen, and “among the publicly traded fashion chains you’d be hard-pressed to find one worse off,” noted Bloomberg. The company said it would close up to 667 stores, and it’s possible that worse is yet to come.