Retailers declare bankruptcy for a myriad of reasons, most of which these days are similar - concept staleness, too much debt, over-stored, the Amazon effect and an ineffective omnichannel strategy. As the trend in retail bankruptcies has continued through 2019, we keep a close eye on the new filings to examine the potential effect on the broader retail market and the downstream industries and small retailers that are faced with absorbing the impact. Below is the updated list of retail bankruptcies so far this year as reported by Retail Dive:
Destination Maternity - October 21
Forever 21 - September 29
Fred's - September 9
Sugarfina - September 6
Avenue - August 16
A'gaci - August 7
Barneys New York - August 6
Charming Charlie - July 11
Roberto Cavalli - April 4
Z Gallerie - March 11
Diesel USA - March 5
Payless ShoeSource - February 18
Things Remembered - February 6
Full Beauty Brands - February 3
Charlotte Russe - February 3
Gymboree - January 16
Shopko - January 16
Innovative Mattress Solutions - January 14
Beauty Brands - January 4
What is particularly concerning about more retailers being added to the list is that not only are we are on the brink of the holiday shopping season, but recent estimates from the US Commerce Department show that retail sales fell in September by -0.3% due to decreased spending on automobiles, building materials, and online purchases. This is the first decrease since February, and it is causing widespread concern that manufacturing-led weakness and trade tariff challenges are hitting the broader market. If consumers are starting to get nervous and holding on to their wallets, and declines in spending hold or potentially worsen, it is prudent to consider and prepare for the potential negative impact on retailers already in precarious situations.