Retail bankruptcies march toward post-recession high

CNBC ^ | March 31,2017 | Krystina Gustafson |

[Hojczyk]

Regardless of their reason for filing for bankruptcy, more retailers who enter Chapter 11 are ending up in liquidation. That's because of a change in the bankruptcy code in 2005, which trimmed the timeline retailers have to gain approval for sale or reorganization.

While they used to be able to spend more than a year in bankruptcy, they now have 210 days to decide whether to keep a store's lease. Because going-out-of-business sales can take 90 days to run, senior lenders often try to make that decision in as little as 120 days.

As chains liquidate or restructure, their store footprints are eliminated or whittled down. Aeropostale, for example, shuttered nearly 600 stores in its reorganization last year. Meanwhile, Sports Authority's 460 locations went dark after it liquidated.

Year-to-date Chapter 11 filings:

Gordmans Stores Gander Mountain General Wireless Operations (formerly RadioShack) HHGregg BCBG Max Azria Michigan Sporting Goods Distributors Eastern Outfitters Wet Seal Limited Stores

But it isn't just bankrupt retailers chopping off real estate. Macy's, J.C. Penney, Sears and Kmart are in the process of closing nearly 400 stores, as smaller chains like GameStop and Abercrombie & Fitch take similar actions. Those vacancies are likely to have ripple effects through the industry, Rieger-Paganis said.

[Biggirl]

Plus there is pressure to become a “Prime” member or you are dropped from Amazon.

[Biggirl]

Correction: which is.

[Biggirl]

At least with EBay there is no pressure to join special program like what Amazon has in “Prime”.