2017’s Retail Bankruptcies Not Over Yet

May 8, 2017         By: Steven Anderson

We all know that the retail landscape has been fundamentally changed thanks to the arrival of online commerce. The ability to buy things while sitting on our couches, or even from most anywhere with mobile shopping and mobile payments, has shaken up retail. With 2017 already something of a high-water mark for retail bankruptcies, a new report from the Wall Street Journal and S&P Global Market Intelligence says the disasters likely aren't over yet.

So far, 14 retailers have already filed for bankruptcy this year. Last year's number was 18. A new list points to 10 more likely bankruptcies by the end of this year, a number which would drive the final total even farther. Sears is said to be at the top of the list for likely bankruptcies, followed close by DSGE Companies, Appliance Recycling Center, Bon-Ton, and BeBe to round out the top five.

S&P Global Market's director of risk services Jim Elder commented “The shift to online shopping has left a lot of financial distress in its wake. The results from the first quarter do not suggest that a quick recovery is on the horizon.”

That quick recovery may never arrive. There might not even be a slow recovery. For good and ill alike, we're looking at a landscape where most of our shopping is done online. Businesses can either accept this and work accordingly or be next on the bankruptcy block. We can buy our clothes and our batteries and our just-about-anything online, so being in that market is going to be a major loss unless there's a reason to go in the store.

The practice of showrooming, for example, is a major reason to have stores; we want to see what the picture on that television looks like. We want to sit on that riding mower to make sure we can remain seated there for maybe two or three hours cutting grass. For that, we need a place to physically interact with these things to make sure they're what we want instead of playing an endless game of buy-and-return.

The only way to survive online shopping is to do what online can't. Without that key feature, there's no reason to stay open.