As 2024 came to a close, some notable bankruptcies emerged. Party City, for instance, declared bankruptcy for the second time in less than two years, planning to close all its locations. Similarly, The Container Store filed for Chapter 11 with an acquisition plan involving its term lenders. While these cases will continue to unfold in 2025, they represent only a fraction of last year’s court filings.
Retail Dive tracked nearly 20 significant bankruptcies in 2024, including repeat cases like Rue 21 and newer entrants such as Foxtrot. Companies like Joann and 99 Cents Only had been seen as at-risk for years. High-profile names such as Tupperware, Big Lots, and Express also sought bankruptcy protection.
Retail Distress: Outlook for 2025
While retail distress and defaults surged in recent years, Moody’s Ratings projects a potential decline in 2025. According to Raya Sokolyanska, Vice President of Corporate Finance at Moody’s, many financially vulnerable retailers have already filed for bankruptcy, and access to funding for at-risk businesses has improved.
Moody’s highlights several retailers still on its distressed list, including Joann, Saks Global, Guitar Center, and At Home. Likewise, S&P Global Ratings has flagged companies such as Qurate Retail Group, Guitar Center, and At Home due to their concerning credit ratings. S&P’s Bea Chiem notes that economic pressures and stretched consumers are creating an environment where discretionary spending remains low, potentially leading to further financial trouble in 2025.
Additionally, the potential introduction of tariffs, as indicated by President-elect Donald Trump, could exacerbate inflation and raise costs for consumers, particularly affecting retailers reliant on imports. This is expected to strain companies in discretionary categories even further.
Retailers most at risk
While it is impossible to predict which retailers will file for bankruptcy, CreditRiskMonitor has identified companies at higher risk based on their FRISK and PAYCE scores. These scores analyze factors such as financial performance, credit ratings, and payment behaviors to estimate the likelihood of bankruptcy within 12 months.
Public retailers
CreditRiskMonitor lists 10 notable public retailers with a 4%-50% chance of bankruptcy, including:
Wayfair and Kirkland’s: Both suffering from a sluggish housing market.
Qurate Retail Group (QVC’s parent): Struggling with debt and declining sales.
Office Depot and Children’s Place: Facing ongoing demand challenges.
| Name | Sector | Frisk Score |
|---|---|---|
| Beyond | Home | 2 |
| Big 5 Sporting Goods | Sporting Goods | 2 |
| Children’s Place | Apparel | 2 |
| Designer Brands | Apparel | 2 |
| Kirkland’s | Home | 2 |
| Office Depot (ODP Corp.) | Office Supplies | 2 |
| Pish Posh | Baby | 2 |
| Qurate Retail | Video Commerce | 2 |
| Rent the Runway | Apparel | 2 |
| Wayfair | Home | 2 |
Private retailers
Among private companies, more than 30 names appear on CreditRiskMonitor’s high-risk list, including:
Glossier, Everlane, Lunya, and Untuckit: Formerly buzzworthy startups now facing financial pressures.
Hudson’s Bay Company and Neiman Marcus (part of Saks Global): Navigating structural changes and economic challenges.
| Name | Sector | Payce Score |
|---|---|---|
| Benitago | E-commerce | 1 |
| Blue Nile | Jewelry | 1 |
| Camp | Kids | 1 |
| Ember Technologies | Tech | 1 |
| Everlane | Apparel | 1 |
| Francesca’s | Apparel | 1 |
| FYE | Media | 1 |
| Glossier | Beauty | 1 |
| Hudson’s Bay Company | Department store | 1 |
| JP Outfitters | Apparel | 1 |
| Living Spaces Furniture | Home | 1 |
| Lunya | Apparel | 1 |
| Madison Reed | Beauty | 1 |
| New York & Co. | Apparel | 1 |
| PacSun | Apparel | 1 |
| Pier 1 Imports | Home | 1 |
| Rainbow USA | Apparel | 1 |
| Rue21 | Apparel | 1 |
| Thrasio | E-commerce | 1 |
| Untuckit | Apparel | 1 |
| Vineyard Vines | Apparel | 1 |
| The Walking Company | Footwear | 1 |
| At Home Stores | Home | 2 |
| Backcountry | Athletics | 2 |
| Bargain Hunt (Essex Technology Group) | Discount | 2 |
| Dormify | Home | 2 |
| Dream on Me/BuyBuy Baby | Baby | 2 |
| Fanatics | Athletics | 2 |
| Gabriel Brothers | Off-price | 2 |
| Rue Gilt Groupe | Off-price | 2 |
| StockX | Resale | 2 |
| Telfar Holding | Luxury | 2 |
Key Case Studies
Beyond Inc.
Formed after Overstock acquired Bed Bath & Beyond in 2023, Beyond Inc. has struggled with operational and strategic missteps. The company’s brands, including Zulily and BuyBuy Baby, face ongoing financial difficulties. With a FRISK score of 2, Beyond Inc. has a 4%-10% chance of filing for bankruptcy in 2025.
Everlane
Once known for its ethical fashion and sustainability, Everlane has grappled with profitability issues and management turnover. Layoffs, delayed payments, and rising financial risks place Everlane in a high-risk category, with a PAYCE score indicating a 10%-50% chance of bankruptcy.
Designer Brands (DSW)
Despite efforts to strengthen its brand portfolio, Designer Brands has experienced sales declines and leadership changes. Its FRISK score signals a 4%-10% bankruptcy risk within the next year.
Glossier
The beauty brand built on cult products and millennial appeal has faced financial strain and leadership changes, coupled with payment delays. Its PAYCE score points to a 10%-50% chance of bankruptcy.
Backcountry
Acquired by CSC Generation in 2024, the outdoor retailer is feeling the effects of declining consumer interest in outdoor gear. Late payments and financial pressures give Backcountry a 6%-10% bankruptcy risk.
Madison Reed
Despite ambitious plans for expansion, the haircare company has struggled to meet its goals amid waning venture capital funding. Late payments and financial challenges have placed Madison Reed at a 10%-50% bankruptcy risk.
Conclusion
Although the retail sector may see a decrease in distress overall, economic uncertainty and evolving consumer behavior continue to pose challenges. Tariffs, inflation, and weak discretionary spending could further impact vulnerable retailers. While not all high-risk companies will file for bankruptcy, signs of financial stress suggest another turbulent year for the industry.
Bron: Retail Dive
Foto: Shutterstock
