Retailers risking bankruptcy in 2023

October is upon us, and with it the hope that the upcoming holiday season will lift sales for struggling retailers. Post-pandemic, retailers such as Target and Walmart have been able to overcome the operation and commercial challenges brought upon by the aftermath of the global COVID pandemic. Other retailers, like Party City, Bath, Beth and Beyond, and David’s Bridal, did not have the same luck, with both retailers filing for bankruptcy earlier this year.

Supply chain disruptions, interest rate hikes, high inflation, political uncertainty, and the war in Ukraine have transformed consumers’ preferences and purchasing behavior, putting retailers already under strain at risk of bankruptcy.

CreditRiskMonitor used the FRISK score to list 11 retailers risking bankruptcy within the next 12 months.

Who files for bankruptcy eventually comes down to which retailers are the most leveraged. In fact, the majority of high-profile bankruptcies had recently gone through a leveraged buyout (LBO), like Toys R Us. Some retailers, however, had seen an uptick in sales during the pandemic, which might have at the time looked like a turnaround, but ultimately was nothing more than a temporary reprieve. One of these retailers is Joann, the arts and crafts store.

Other retailers, such as Rite Aid or Petco, are just carrying too many debt obligations, leaving them financially vulnerable.

Original article published on Retail Dive.