Fitch Study: Sears, Claire’s at High Risk of Default

A Fitch Ratings study of retail bankruptcies indicated that Sears Holdings Corp., Claire’s Stores Inc. and Nine West Holdings Inc. are among seven chains that have a good chance of defaulting within the next year. The companies were named in a 114-page report stating that retailers end up liquidated almost three times more often than other companies in bankruptcies, as turnarounds are more difficult to execute.

The credit-grading firm studied 30 retail bankruptcies involving $10.5 billion of debt. Fifty percent of those didn’t survive the process, compared to 17% across other industries. The reason for the Fitch conclusion also focused on the fact that shoppers are shifting to e-commerce, while spending more on experiences.

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