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Nowack & Olson, PLLC Florida Bankruptcy Lawyer

More Businesses on the Cusp of Bankruptcy

BusBankr2

The recent announcement that Payless has filed for bankruptcy is a testament that the turmoil in the retail industry is far from over. According to Business Insider, four large retailers have already filed for bankruptcy in the first two months of 2019, and there is no reason to assume the pace will slow for the rest of the year.

According to Moody’s Investors Service, another 17 retailers are at risk of heading into bankruptcy court or defaulting on their debts. Several months ago, we wrote about several of them that were struggling with debt in 2018—Guitar Center, Petsmart, J. Crew, and Neiman Marcus. Moody’s predicts that they will continue to struggle.

Below, we present some of the other retailers that could be facing reorganization or liquidation this year.

Academy Sports & Outdoors

This is a sporting goods retailer with over 200 locations, but it is competing with larger retailers like Walmart, Dick’s Sporting Goods, and Amazon. With their larger size, these rivals can undercut Academy on price and offer more of a selection.

However, according to Moody’s, Academy has a decent credit position so it might be able to hang on until 2022, at which point much of its debt will mature.

Pier 1 Imports

This home goods retailer is facing stiff headwinds, including increased competition as well as tariffs on the goods made in China. The company’s earnings are a source of concern. Although its debt load seems manageable now, things could worsen in the next 12 months unless there is an uptick in sales.

Fairway Group Holdings Corp.

Moody’s has identified this supermarket chain in the Northeast as a risk for bankruptcy because it is competing with much larger companies, in particular Whole Foods and Trader Joe’s.  According to the analysts, the lack of capital will make it harder for the company to perform effective marketing and promotions so that it can carve out more market share against its rivals.

The company’s head, Abel Porter, has disputed that his company is at risk of going under. Instead, he told Bloomberg that his company has been stockpiling cash. We’ll have to wait for the future to find out who is right.

David’s Bridal

A Chapter 11 bankruptcy is designed to allow a business to reorganize its debts while continuing as a business. If all goes well, the company should emerge from bankruptcy leaner and meaner—and hopefully on solid financial footing.

That doesn’t seem to have happened with David’s Bridal, which only recently emerged from bankruptcy protection and saw it shrink its debt by almost half a billion. Unfortunately, David’s is also seeing declining sales as the wedding market undergoes upheaval. Unless sales begin to rebound, the company might not survive.

Rescuing the Family Business

Small and family businesses are as likely to struggle with debts as larger retailers, even in a strong economy. At Nowack & Olson, we have helped many small business owners finally confront their debt situation.

If you would like more information, please reach out to us today. One of our Plantation bankruptcy attorneys can meet with you to go over your credit position and consider your options. Please call 888-813-4737 to schedule an initial consultation.

Resource:

businessinsider.com/retail-bankruptcies-expected-this-year-2019-2

https://www.floridabankruptcynow.com/boy-scouts-considering-bankruptcy/

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