Times are tough in retail, especially for this holiday season. While a few are doing well… Amazon, Target, Walmart, and the like, many are not. This article focuses on eight retailers that are particularly vulnerable and are entering into a do or die scenario. Sears and Kmart, JCPenney, Bed Bath & Beyond, Neiman Marcus, Claire’s Stores, Charlotte Russe, and J. Crew are all being watched closely this season.
Sears and Kmart
This is the most obvious example. Parent company Sears Holdings filed for Chapter 11 bankruptcy protection in October after years of sales declines, ballooning debt, steep pension costs and a failure to adapt to digital competition. The company, which is already closing 188 of its remaining 687 stores, is at serious risk of total liquidation if it can’t obtain new financing and reach a restructuring deal with its creditors.
“JCPenney has had a lot of change and continues to try to address its apparel,” said Christina Boni, a Moody’s Investors Service vice president, who tracks retail. “They have new management, but obviously these things take time to make changes.” The company’s foray into appliances and toys haven’t paid off yet. While in-store beauty partner Sephora has helped deliver foot traffic, JCPenney faces a similar challenge as Sears: defining its appeal to customers in a digital age that has diminished the usefulness of variety. “It’s about how do you recreate the magic of retail?” said Greg Portell, lead partner in the global consumer and retail practice of A.T. Kearney, a strategy and management consulting firm. “And the less-defined brands will struggle with that.”