%1

Retail bankruptcies have already set a record pace this year, and the pain isn’t over yet, the Wall Street Journal reported today. The number of bankruptcies so far this year has already come close to the total in 2016, with 14 retailers filing compared with 18 last year, according to S&P Global Market Intelligence. Payless.. Inc., RadioShack Corp. and Limited Stores Co. are among those that have sought relief from creditors. Researchers at S&P Global Market Intelligence last week released a list of 10 publicly traded retailers they consider most at risk of default within the next 12 months. The firm’s analysis is based on industry factors, such as intensity of competition and barriers to entry, as well as company-specific metrics. Here’s S&P’s ranking:

1. Sears Holdings Corp.
2. DGSE Companies Inc.
3. Appliance Recycling Center of America Inc.
4. The Bon-Ton Stores Inc.
5. Bebe Stores Inc.
6. Destination XL Group Inc.
7. Perfumania Holdings Inc.
8. Fenix Parts Inc.
9. Tailored Brands Inc.
10. Sears Hometown and Outlet Stores Inc.

Gander Mountain Co., the bankrupt retailer of hunting and fishing gear, has attracted buyer interest that could keep most of its stores open after the company restructures its debt, Bloomberg News reported. Sportsman’s Warehouse Holdings Inc. is planning to bid for as many as 80 percent of Gander Mountain’s stores. Sportsman’s Warehouse is still deciding whether it would keep the Gander Mountain name on those locations or run them under its own brand. Midvale, Utah-based Sportsman’s Warehouse has almost 80 stores in 22 states, mostly in the western U.S., with some in the mid-Atlantic region. St. Paul, Minnesota-based Gander Mountain’s locations, more than 160 in 27 states, are concentrated in the east. Sportsman’s Warehouse has about $200 million in debt and its revenue has been rising in recent years, according to data compiled by Bloomberg.

Retailers are filing for bankruptcy at a record rate as they try to cope with the rapid acceleration of online shopping, Bloomberg News reported yesterday. In a little over three months, 14 chains have announced they will seek court protection, according to an analysis by S&P Global Market Intelligence, almost surpassing all of 2016. Few retail segments have proven immune as discount shoe-sellers, outdoor goods shops, and consumer electronics retailers have all found themselves headed for reorganization. Meanwhile, America’s retailers are closing stores faster than ever as they try to eliminate a glut of space and shift more business to the web. S&P blamed retailer financial struggles on their inability to adapt to rising pressure from e-commerce. Urban Outfitters Chief Executive Officer Richard Hayne said as much on a conference call with analysts last month. There are just too many stores, especially those that sell clothing, he said. “This created a bubble, and like housing, that bubble has now burst,” said Hayne. “We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.” Read more.

In related news, suppliers are becoming increasingly concerned they won’t be paid for the goods they ship to struggling or bankrupt retailers, and they’re taking more aggressive steps to protect themselves, Bloomberg News reported. “Vendors are getting extraordinarily nervous,” said Hilldun Corp. Chief Executive Officer Gary Wassner, whose firm finances fashion suppliers. He now gets two or three extra calls a day from worried manufacturers that sell to retailers, including luxury stores. Bankruptcies at Payless, Gordmans Stores, Wet Seal and RadioShack’s ill-fated successor General Wireless have rocked the industry this year. Chains such as Bebe Stores Inc. have made plans to shut their brick-and-mortar locations. And Sears Holdings Corp., once the world’s largest retailer, warned investors last month that there was “substantial doubt” about its ability to keep operating. Read more. 

What effect will bankruptcy have on the supply chain? Pick up a copy of ABI’s Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains. 

The beleaguered women's retailer Bebe is swiftly closing all of its stores following years of declining sales and losses, Forbes reported on Friday. The women's clothing and accessories retailer said in a regulatory filing on Friday that it would move to close all of its stores by the end of next month. It also plans to liquidate all its merchandise and store furnishings. Bebe, which had 180 stores at the end of last year, was founded by Iranian-born immigrant Manny Mashouf in 1976. Bebe's plan to close its stores comes less than a month after it said it was considering strategic alternatives. According to a Bloomberg report, the company is trying to stave off bankruptcy by closing stores and shifting its resources online. Bebe did not provide any information about its plans for the future on Friday. As a result of the store closings, Bebe will incur an impairment charge of roughly $20 million to be recorded in the third and fourth quarters.