2016 ended on a high note with higher than expected holiday sales and overall a better real estate market. However, there were a number of retailers that sought bankruptcy protection. Some of the retailers, like Fairway and EMS, emerged as new entities in Chapter 11 bankruptcy proceedings while their operations continued. Yet others, like Sports Authority and PacSun, closed their doors, leaving open spaces for landlords.
As we enter the New Year, following is a list of 10 potential impending tenant bankruptcies to keep an eye out for:
- Sears Holdings – Recently, a number of Sears and Kmart stores began closing stores across the country. Further, Sears sold its valued Craftsman brand to Stanley Black & Decker, Inc.
- Claire’s Stores, Inc. – Clark’s places this chain on the watch list due to high outstanding debt.
- The Limited – This company is closing all its stores this month, while continuing to operate online after the closures complete.
- CVS – The company plans to eliminate roughly 300 jobs and close 200 stores, equal to about 5 percent of its outlets, according to The Wall Street Journal.
- Rue21, Inc. – This retailer is facing tough competition in the youth retail market and hold high debt according to Clark’s.
- Chico’s – The company announced it will close 120 stores in the next three years.
- American Eagle Outfitters – The company is slated to close 150 of its more than 1,000 stores by the end of 2017. Like a number of other “youth retailers,” American Eagle has struggled recently according to the International Business Times.
- Office Depot – In May 2016, antitrust concerns derailed a merger with the office supply retailer and Staples, a competitor. Since then, the company announced it would close about 300 more stores in the next three years, according to Fortune.
- The Children’s Place – Another 200 stores are slated to close in 2017, according to chainstorage.com.
- Payless – FootWearNews.com recently reported several of Payless’ major vendor partners noted that the retailer is behind on its bills.
- Finish Line – The sports apparel closed 54 stores in 2016, and plans to close another 25 stores in 2017, according to indystar.com.
For more information on how to protect your center against these possible upcoming filings, please contact Thomas Onder, Shareholder in Stark & Stark’s Creditor’s Rights Group at (609) 219-7458 or firstname.lastname@example.org. Mr. Onder writes regularly on commercial real estate issues and is a member of ICSC and co-Chair of the 2017 ICSC PA/NJ/DE Dealmaking Show in Atlantic City, NJ, as well has recently represented landlords in the EMS, RadioShack, A&P, Fairway, and Sports Authority Chapter 11 bankruptcy cases.