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2017 Bankruptcy Infographic: Apparel Retail’s Year of Reckoning

Though the Internet had been taking ever bigger bites out of traditional retail for years, 2017 exposed just how long it took for the apparel industry to digest the scope of the impact.

As a result, the year began with a slew of chains teetering on the verge of collapse with some ultimately succumbing to bankruptcies. Among the leading factors for stores like Gymboree and Rue 21 was insurmountable debt, which for most was the result of private equity buyouts. In many cases, the issue was also that these stores had lost their relevance. No longer was there a point of differentiation between them and a host of other me too brands. Of the bankrupt entities, some like Payless re-emerged quickly with restricted disruption, while others like The Limited were spared complete demise through bankruptcy acquisitions that brought them back in altered forms.

Those that hung on were in the unenviable position of playing catch up. The first step for many was recognizing that they had way too many stores in an era of waning foot traffic. With this revelation came the closure of dead weight locations. It has been estimated that more than 8,000 stores closed in 2017 across all retail sectors. The mass exodus from malls created opportunities for thriving properties and serious concerns for B and C grade centers. As a result, nearly all are covering themselves going forward by limiting the number of apparel retailers they sign as tenants.

The next step in the survival handbook was to develop sweeping transformation plans. One by one the majors rolled out new strategies designed to help them leverage their physical stores in support of often-booming e-commerce sales. Here, retailers used services like buy online, pickup in store to get Web customers into their locations. They also devised ways to better use their boxes as last-mile fulfillment centers.

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The transformations also called for a rejiggering of corporate roles in a quest for speed. By reimagining how merchandising teams should operate, retailers hope they can offer more compelling product, respond to demand faster and generally provide the right merchandise in a timely manner.

Other initiatives that were common across these plans were revamping loyalty programs, increasing private label assortments and employing data analytics.

Even with these efforts though, Moody’s has already warned that retail bankruptcies won’t be contained in 2017.

“I think the early part of next year will be pretty bad … I think it will be tough,” Moody’s lead retail analyst Charlie O’Shea told CNBC. “Think about it: if you’re a highly leveraged brick-and-mortar retailer, how do you compete” with Walmart and Amazon’s price wars.

Specifically the credit ratings firm is watching Claire’s , J. Crew, Charlotte Russe, Bon-Ton Stores, Nine West and Sears.

Click through the infographic below to see how things played out for the apparel retailers that filed for bankruptcies this year.