22 Retailers On the Verge of Bankruptcy?
As has been widely reported, brick and mortar retailers are having a tough time in today's online environment.
According to Money Magazine, 22 Retailers are on the verge of bankruptcy! The article cites a report released last week by Moody’s Investors Service that indicates ratings of Caa or worse—defined as “subject to very high credit risk”—to 22 major retailers. The article further discusses that "distressed retailers" such as Sears and Neiman Marcus "are facing a “perfect storm,” quoting senior Moody’s retail analyst Charles O’Shea who told USA Today, “You’re on the Andrea Gail right now, and the water’s starting to get very choppy.”
According to sources cited in the article, "after years of struggling to compete with all-powerful Amazon, retailers have been closing hundreds of stores amid declining sales. Analysts are even predicting that one-quarter of America’s malls could close within the next five years."
This headline is juxtaposed against today's other big news: The Department of Justice has approved the merger of Amazon and Whole Foods. Amazon has announced it is ready to deliver "deals" and lower prices, particularly to Amazon Prime customers. The shares of all other grocers are being dramatically impacted.
What does the future hold for retailers, and in particular, grocers? Forbes asked the question this way: Does The Amazon-Whole Foods Merger Spell The End Of Grocery Shopping (As We've Known It)?
Analysts Elley Symmes, with Kantar Retail, and Brian Yarbrough, with Edward Jones, described the merger, as "the biggest disruption for the business since Wal-Mart began opening supercenters decades ago." See the full discussion: http://www.thepacker.com/news/amazon-acquire-whole-foods
One prediction that I feel certain about. A lot of legal work is going to flow from this changing retail and online environment; from employment law to bankruptcy law, and everything in between, the "[retail] times they are a changing." How will retailers respond to these changing times?