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Eight retailers that could go bankrupt this year

Last week, America’s largest mattress company – Mattress Firm – became the latest victim of the retail apocalypse, filing for Chapter 11 at Denver Bankruptcy Court. Mattress Firm was, in fact, the largest retailer to go bust this year, pledging to close as much as 700 stores across the country.

Though the rate of retail bankruptcies has been slower in 2018 than last year, mall vacancy rates climbing to a seven-year-high of 9.1% during the third quarter gives little hope of a recovery. More than 50 stores had filed for bankruptcy last year – including Toys R Us and Gymboree – which was the highest since 2011.

The S&P Global Markets had earlier this year predicted that retail bankruptcies in 2018 could touch last year’s levels as many companies face a liquidity crisis. With only over two months to spare this year, let’s take a look at a few companies that could be facing a potential doom.

99 Cents Only Stores

Faced by cut-throat competition from Walmart (WMT), Dollar Tree (DLTR) and Dollar General (DG), 99 Cents Only has been struggling to make profits. Though the company, which appointed a new CEO in February, has been posting slight increases in comp sales, it has come at the cost of unsustainable discounts.

Companies that could go bankrupt this year sears
Image courtesy: Wikimedia Commons

Sears Holdings

Bankruptcy of this retail giant has been long overdue. It has been saved every time over the past decade with the help of CEO Eddie Lampert’s hedge fund loans. If the company fails to repay the debt obligations, it is going to be in big trouble. Sears Holdings (SHLD) stock has lost 92% of its value in the past one year.

J Crew

The New York-based specialty retailer is sitting on the top of a debt mount, thanks to a buyout in 2011. The once go-to place for pullovers tried to reinvent itself last month with rebranding, which could be seen as a last try to stop the company from failure. With years of dwindling sales and the brand losing its sheen, chances of a revival are abysmal.


Shares of GNC Holdings (GNC) have tumbled 50% during the past 52 weeks as investors have been steadily losing faith in the health and supplements provider.  Last month though, shares jumped a good 27% after a $300 million investment in the company by Harbin Pharmaceutical Group Holding received regulatory approval. Though the investment comes as a minor relief to its massive debt load, whether this will be adequate for a turnaround is yet to be seen. Vitamin Shoppe (VSI) is another company in the same industry that is facing fallout due to declining mall traffic.

America’s largest mattress company files for bankruptcy protection

Neiman Marcus

The department store company has been doing relatively good sales in the past few quarters, but a debt burden of $4.8 billion is pulling the company down. The Dallas, Texas-based firm has been doing everything in its capacity to save itself – from a management rejig to a digital-first sales approach – but nothing has yet served the desired results. A potential acquisition by Hudson’s Bay also fell apart in June, shattering hopes for a turnaround.

Guitar Center

Apparently, millennials are not guitar freaks like baby boomers. The company, founded in 1959 has seen a sharp drop in sales over the past few years. With sales of electric guitars plummeting as much as 36% between 2005 and 2016, there is little to save the company from sinking.

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