Are Failing Retailers Holding Back An Already Struggling Industry?
More retailers are facing the possibility of bankruptcy than anytime since the crisis, and experts say these retailers hanging on by a mere thread are putting added pressure on an already struggling industry.
According to figures from Moody’s, 13.5% of retailers have very poor speculative debt, up from 5.6% in late 2011 and close to the 16% financial crisis levels seen in 2009, the Wall Street Journal reports. Companies like Sears, Payless ShoeSource, Fairway Group Holdings and True Religion Apparel fall within that category.
The problem is not just that these companies are teetering on the edge of bankruptcy. Experts said the problem lies in the fact that investors are not allowing these retailers to die; instead they're crowding the market and damaging healthier brands, many of which are being forced to restructure and shutter stores due to e-commece competition, despite having their financials in decent order.
