Brick-and-Mortar Chains Going Bankrupt at Fastest Pace Since 2020

Brick-and-Mortar Chains Going Bankrupt at Fastest Pace Since 2020

Troubled retailers that stayed alive thanks to heady consumer spending during the COVID-19 pandemic are now showing signs of distress, filing for bankruptcy at the highest rate since 2020, and closing hundreds of stores, SupplyChainBrain reported. A dozen large retailers with shrinking revenue or high debt have filed for bankruptcy so far this year. That’s as many did in the entirety of 2021, and more than double the total for 2022, making this the most active year since the onset of the pandemic, according to BDO. Discount home-goods chain Christmas Tree Shops, its former parent Bed Bath & Beyond and wedding-gown supplier David’s Bridal have filed for chapter 11 over the past several weeks, hurt by wage and price pressures and changing consumer preferences. More bankruptcy filings or rescue deals are expected among retailers on weak financial footing. Retail earnings have broadly fallen amid a change in attitude among consumers who had to cut back on discretionary spending to cover the rising costs for essential items such as food, gas and housing. A glut of inventory also forced companies to resort to big markdowns. Strong consumer spending and readily available financing during the pandemic years helped struggling retailers to stay afloat, but high inflation and the tightening lending market are now pushing them into bankruptcy.
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