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Welcome to The Backroom, a window into what’s happening behind the scenes as the Retail Dive team covers the stories and trends reshaping retail. You can check out all of our podcast episodes (past and present) here and listen Apple podcast, embroiderer, iHeartRadio and Spotify.
Distressed retailers are not so different from others. They face the same vagaries of the market, the same major fluctuations in consumer behavior and the same uncertainties in trying to anticipate the future.
Balance sheets can be the difference between a company facing bankruptcy and one simply weathering a short-term macro headwind. Again, others have made bad bets on their business investments or where their consumers or the world is headed. Yet others have a long history of not being profitable before finally catching up. Their model might never have been sustainable.
Retail Dive publishes at least one watch list of retailers in financial difficulty and at risk of bankruptcy each year. Examining the lists from year to year can tell us a lot about the industry, and not just about the people in distress.
This year, our watchlist was several times longer than last year – one more sign of how the fortunes of the industry have changed in such a short time.
The decline in consumer spending exposed existing vulnerabilities while creating new vulnerabilities for more than a small number of retailers. In this episode of Backroom, we look at the importance of bankruptcy risk and what everyone can learn from these struggling businesses today.
Editor’s Note: This show was produced and edited by Caroline Jansen.