US retailers going out of business 2017: Analysts predict next 10

Just four months into 2017, 10 U.S. retailers have filed for bankruptcy. Last year, the total number of American retailers that declared bankruptcy was 18.

And, according to new insights from S&P Global Market Intelligence released last week, there are more to come.

"The convenience of online shopping, and the downward pressure it has put on pricing, has radically altered consumer behavior," S&P analysts wrote. "Most shoppers now browse for value online, and the younger cohort of the prized millennial demographic, some of whom may never have developed a penchant for long afternoons at the mall, clearly prefers that channel."

To determine which companies are most at risk for being next to file bankruptcy, S&P researchers used a statistical model — the Probability of Default (PD) Fundamentals model — that calculates companies’ PDs over a one- to five-year period.

They identified the 10 U.S. retailers with one-year PDs ranging from 6.11 percent (significant risk) to 23.84 percent (highly leveraged credit risk).

A day after the report was released, one of the 10 at-risk companies, Bebe Stores Inc., announced plans to close all 168 of its stores.

Here are the 10 U.S. retailers ranked in order of likelihood to default, according to S&P:

1. Sears Holdings Corp., Illinois (Sears, KMart)

PD: 23.84%

2. DGSE Companies Inc., Texas (Dallas Gold and Silver Exchange)

PD: 14.87 percent

3. Appliance Recycling Centers of America Inc., Minnesota

PD: 11.96 percent

4. The Bon-Ton Stores Inc., Pennsylvania (Bon-Ton department store)

PD: 10.48 percent

5. Bebe Stores Inc., California (Bebe)

PD: 10.06 percent

6. Destination XL Group Inc., Massachusetts (Big & Tall men's apparel)

PD: 8.08 percent

7. Perfumania Holdings Inc., Florida (Perfumania.com)

PD: 7.24 percent

8. Fenix Parts Inc., Illinois (Automotive parts recycler)

PD: 6.98 percent

9. Tailored Brands Inc., Texas (Men's Wearhouse, Moores, Joseph Abboud)

PD: 6.8 percent

10. Sears Hometown and Outlet Stores Inc., Illinois (Sears Hometown and Sears Outlet)

PD: 6.11 percent

Read the full S&P Global Market Intelligence report for more about the companies and the effects their failures can have on other sectors.

Retailers closing brick and mortar stores

About the Author

Fiza Pirani

Fiza Pirani is an Atlanta-based freelance writer and editor.

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