Retail's Troubled Waters - Oh, and Macy's...


The acceleration of the retail downfall has been monumental, to say the least. Only five months into 2020, these fourteen retailers and restaurant chains have filed for bankruptcy or are preparing for liquidation.

  • Neiman Marcus

  • Lord & Taylor

  • Aldo Shoes

  • J. Crew

  • J. Jill

  • Papyrus

  • Modell's

  • Lucky's Market

  • Earth Fare

  • Pier 1

  • Art Van Furniture

  • Food First Global Restaurants - Brio and Bravo

  • True Religion

  • John Varvatos

  • Bluestem Brands - Appleseed's, Blair, Draper's & Damon's, Gettington, Fingerhut, Haband, and Old Pueblo Traders

As if that's not enough, data provided by CreditRiskMonitor paints a grim picture looking forward. Measured on a scale of 1-10 with 1 being the worst, the FRISK score measures the probability of bankruptcy within the next 12 months. As demand realities shake out from the reemergence of the public from stay-at-home orders, it will be interesting to see the steepness of the curve in the coming months. Nevertheless, these twenty-four retailers are at the highest probable risk:

  • J.C. Penny - 1

  • RTW RetailWinds - 1

  • Ascena - 1

  • Stein Mart - 1

  • Rite Aid - 1

  • Kirkland's - 1

  • GNC - 1

  • Party City - 1

  • GameStop - 1

  • Express - 2

  • L Brands - 2

  • Tailored Brands - 2

  • Francesca's - 2

  • Destination XL - 2

  • Children's Place - 2

  • Caleres - 2

  • The Container Store - 2

  • At Home - 2

  • Wayfair - 2

  • Tuesday Morning - 2

  • Chewy - 2

  • Conn's - 2

  • iMedia Brands - 2

  • Michael's - 2

As retailers move from "at-risk" to "over-the-cliff", factors that point to grim reality are oftentimes absent in the conversation, even for those that do not show up in the low scoring. Take Macy's, for instance. It was recently reported that Macy's is seeking to raise as much as $5 billion in debt. Not only would this send their Funded Debt: EBITDA ratio into effectively junk status, but it should come as no surprise if their suppliers begin to struggle with factoring Macy's invoices. It was recently reported that Macy's will not be paying vendors for 120 days. That seems a bit risky. Stay safe and healthy.

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