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Who’s at Risk of Defaulting on Debt ‘Within a Year’?

S&P Global Markets Intelligence’s new list of 15 public retailers on shaky financial footing documents shifting fortunes in fashion and home retail.

Implied credit scores in the range of “CCC+” to “CCC-” kept J.Jill, DXL, and Vince on the May 13 list after appearing in March. The retailers, S&P said, are likely to default on their “debt within a year.”

Express, which wasn’t on the top 15 list in March, appeared on the S&P’s April list. And Chico’s FAS, appealing on the list last month, graduated from the top 15 list along with The Children’s Place.

Off-price home goods retailer Tuesday Morning remains on the list, despite exiting bankruptcy in January. And though Casper Sleep shut down its European operations last year, the online-only bed-in-a-box firm appears on S&P’s watch list, in large part because shares have been trading below its debut price after IPOing in February last year.

S&P chronicled America’s 12 year-to-date retail bankruptcies. Home furnishing retailer Loves Furniture Inc. started the year’s much more muted bankruptcy wave on Jan. 6, followed by Christopher & Banks on Jan. 13. Apparel, accessories and luxury marketing firm Commemorative Brands followed a day later. Belk filed a speedy pre-packaged petition on Feb. 23, and exited one day later. Footwear retailer S&A Retail Inc. filed on March 26, and private beachwear chain L & L Wings Inc. submitted its petition on April 24.

U.S. retail sales in April were essentially flat from March, which saw a 10.7 percent surge. The boost in March came as consumers were spending their stimulus checks, which led some economists to expect a 1 percent gain in April. But the fact that the sales report from the U.S. Commerce Department was unchanged wasn’t necessarily bad news. That just meant that consumers were still spending, but not at a rate that would provide some extra growth, even if it was only a 1 percent uptick. Looking ahead, many economists expect consumer spending to ramp up in the months ahead once businesses and local economies fully reopen.

Retail sales in April rose 51.2 percent from a year ago, when most nonessential retailers were still temporarily closed because of the pandemic, and up 21 percent from April’s 2019 levels.