Is your favorite retailer at the precipice of bankruptcy?
A recent Retail Dive report looked at CreditRiskMonitor data and found that 18 retailers have been assigned very low FRISK scores at the end of the third quarter of 2022, indicating they may be in danger of declaring bankruptcy soon.
CreditRiskMonitor’s FRISK score is a proprietary score that indicates the level of financial stress a company is experiencing. It is based on the probability of a bankruptcy in the next 12 months.
Following are the retailers that appear to be in deep financial trouble.
1. Bed Bath & Beyond
Sector: Home
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
Bed Bath & Beyond is struggling. A recent CNBC report noted that the company has a ton of debt and “strained relationships with merchandise suppliers.” CNBC says the 2022 holiday season may be a make-or-break event for the retailer.
2. Digital Brands Group
Sector: Apparel
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
Retail Dive has reported that about a year after this company went public, it is now in danger of filing for bankruptcy. Digital Brands Group owns several apparel brands, including Stateside and Bailey 44.
3. Express
Sector: Apparel
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
Express may be struggling, but it’s still in the fight. According to an HR Dive report, Express is in the process of “modernizing,” which includes giving employees more flexibility with their schedules.
4. iMedia brands
Sector: Television retail
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
According to a local newspaper report, this Eden Prairie, Minnesota-based interactive media company has only had one profitable year in the past decade. The company recently received a “delisting notice” from the Nasdaq stock exchange when iMedia’s stock price dipped below $1 a share.
5. Kirkland’s
Sector: Home
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
According to news reports, Kirkland’s is carrying a lot of debt, but it is focused on fixing the situation. That gives some observers hope that the future may be brighter.
6. Party City
Sector: Specialty
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
A combination of inflation and supply chain woes is putting a lot of pressure on Party City, according to Bloomberg Law. Time will tell if bankruptcy is in the company’s future.
7. The RealReal
Sector: Apparel
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
The RealReal is a consignment website for luxury goods. PYMNTS reports that The RealReal is having a banner year, but it hasn’t been enough to overcome a previous “multiyear streak of net losses.”
8. Rite Aid
Sector: Drugstores
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
Rite Aid has suffered through multiple quarters with negative net income, and its woes have been several years in the making. The company now has a turnaround plan in place to try to get back on course.
9. Tuesday Morning
Sector: Off-price
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
According to CreditRiskMonitor, Tuesday Morning filed for bankruptcy in 2020 and “never truly recovered financially.” The company is now exploring restructuring options.
10. Wayfair
Sector: Home
CreditRiskMonitor FRISK score: 1 out of 10 (indicating a 9.99% to 50% probability of a bankruptcy filing within 12 months)
Business Insider reports that recent struggles at this furniture retailer led to a layoff of 5% of the workforce. In August, the company reported a $378 million loss.
Other companies at risk
An additional eight companies are also at risk for bankruptcy. These retailers have FRISK scores of 2 out of 10, meaning there is a 4% to 9.99% probability of a bankruptcy filing within 12 months:
- Abercrombie & Fitch — apparel sector
- Big Lots — home
- Farfetch — apparel
- Lands’ End — apparel
- Steinhoff (owner of Mattress Firm) — home
- Stitch Fix — apparel
- ThredUp — apparel
- Torrid — apparel