Posted on 06/24/2022 9:08:45 AM PDT by Ebenezer
The retail industry is facing a potential tidal wave of bankruptcies later this year as rising prices begin to dent consumer demand and stores begin to contend with bloated inventories.
CNBC reports the potential for an economic recession is also still looming. The first domino may have already fallen as beauty giant Revlon filed for Chapter 11 bankruptcy protection last week. Now consumers and shareholders alike are wondering who’s next.
“Retail is in flux,” Perry Mandarino, co-head of investment banking and head of corporate restructuring at B. Riley Securities, told CNBC. “And within the next five years, the landscape will be much different than it is today.”
The retail industry saw a dramatic pullback in restructurings last year and early this year as federal stimulus funds provided cash infusions to companies and consumers. The pause came after the beginning of the pandemic saw several large companies—including JCPenney, Brooks Brothers, J. Crew and Neiman Marcus—file for bankruptcy.
The Revlon bankruptcy brought the number of retail bankruptcies this year to four, the lowest number of retail bankruptcies in more than a decade. However, if inflation continues to rise and the country hits a recession that number could top the 52 retail bankruptcies during the first year of the pandemic.
“What you saw in 2020 was a tremendous amount of restructuring activity getting pulled forward,” Spencer Ware, managing director and retail practice leader at Riveron, said. “Then we got from 2020 through today with a tremendous amount of stimulus. What’s going to happen now? It’s a bit of a mixed bag.”
An analysis by Fitch Ratings shows the consumer and retail companies in the most danger of bankruptcy include mattress maker Serta Simmons, cosmetics line Anastasia Beverly Hills, and clothing chain Men’s Warehouse.
The latest retail sales data show consumers have pulled back spending on retail and food service by 0.3% in May versus April. Furniture and home furnishings, electronics and appliance retailers, and health and personal care retailers all saw declines during the same period.
Get woke, go broke.
We’ll be increasing spending, just getting less in return....
I’m going broke without even getting woke first.
I’ve been saying this for weeks now. Those small businesses that made it through the governments’ draconian lock-down regulations, will be lucky to make it to the end of the year.
I guess the retail corporations shouldn’t have donated to Demonrats.
“You effed up, you trusted us!”
Biden is an economic asp.
Potential….. Looming…… along with all the other words that mean it’s only possible as opposed to inevitable. I think Trump dodged a proverbial bullet because after he signed all the previous Covid stimulus, inflation and recession became unavoidable. Now the Democrats are the ones holding the bag. I was telling people that when they got their stimulus checks they should spend it right away because inflation was coming. It is pretty easy to see that inflation was the sequel to stimulus just a matter of time. Democrats definitely sped it up.
Here’s what I’ve heard from various friends at church who work at the following places in town:
Hobby Lobby - sales are down “significantly” nationwide, layoffs coming locally.
Wal Mart - grocery sales OK, sales of other items down “a lot.”
Home Depot - big decline in sales of building supplies.
Local family restaurant - open only for breakfast and lunch, no longer open for dinner (not enough customers and can’t find workers)
Toyota dealership - only two new cars on the lot. Focusing on used cars. Several sales people quit recently.
It’s getting ugly out there.
I’m amazed at first glance to see many stores that are still in business with near zero floor traffic, but lots of high pricing has made it possible.
My neighbor treated me to a milkshake about a year ago - $6 each.
She walked out of a store asking $37 for a small bag of puppy food.
I was in Florida’s biggest grocery chain a few days ago. About $5 per item on average in many aisles.
I think cars are mainly kept off site, so every vehicle will sell readily.
“...and stores begin to contend with bloated inventories.”
Cr@p from China that no one needs in the first place. I have 18 years of Retail Management behind me. Too bad, not sad!
I’m spending MORE and getting LESS, these days. Just got groceries this morning. My weekly bill is up $40-$50 FOR THE SAME STUFF I’VE BOUGHT EVERY WEEK FOR YEARS!
Don’t even get me started on gas. Beau put $94 of diesel in his work truck yesterday.
I honestly HATE going to the grocery store these days, I try SO HARD to keep it to the bare minimum and STILL can’t get out of the place without spending over a hundred bucks, paper towels, toilet paper, kitty food the necessities have become unreasonably expensive I HATE this administration!! I honestly can not believe how peop,e forgot in just 4 short years how bad things were during Obama and just went RIGHT BACK TO IT!!{ YES I fully believe the election was stolen NOT A DOUBT IN MY MIND!!
“I think cars are mainly kept off site, so every vehicle will sell readily.”
Except for the 2 vehicles on the lot, all of the new vehicles listed on their site have been reserved by someone who put down a deposit. (I know. I asked.) The wait is at least six months, more than a year for the popular models. The only way to get one of those listed cars is if the buyer backs out of the deal.
You are not alone. Those are the sentiments of millions upon millions of Americans who are equally distressed about the destruction the illegitimate Biden regime has caused to this nation.
MIDDLE CLASS is being hit, the 4th sans fireworks is about $70.00 higher unless you’ve been stocking, watch that expiration dates some are reading 2022 or 9 months at 2023, Biden Great Depression 2, late 2023-24.
Low income will get SNAP. WIC.
Went to a local pizzeria the other day. A medium pizza with just a few options was priced …..$32 !!! Used to be $15 not long ago! I left without ordering.
When disposable money dries up and consumers have to struggle to pay for the necessities of life business that sell ‘trinkets’ are going to see demand fall off a cliff.
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