After a vicious year of bankruptcies, some retailers are still at risk. 13 companies, including Rite Aid, Belk, and Neiman Marcus, could be the next to default.

empty sears store closure retail apocalypse
A worker removes sale banners inside a closed Sears department store one day after it closed in January 2019. REUTERS/Mike Segar

  • Moody’s identified 13 retailers at the highest risk of defaulting or filing for bankruptcy in 2021.
  • Apparel and department store retailers, they said, remain the most at-risk.
  • Men’s Wearhouse, Talbots, Belk, and Party City all made the list.
  • See more stories on Insider’s business page.

Apparel and department stores are the most at risk for defaulting on their loans in 2021, analysts with Moody’s Investors Service said in an April 7 report.

After a brutal year in 2020, in which dozens of retailers filed for bankruptcy, more filings could be coming, but not as many as last year, the analysts said.

Apparel stores accounted for about half of defaults in 2020, and the sector is still “in the eye of the storm,” as it confronts long-term pressures, like declining mall traffic, the analysts said.

Although the 2021 forecast “marks a vast improvement over the prior year, it is still historically high relative to prior recoveries, pointing to significant ongoing risk for an industry not yet out of the woods,” the report said.

Read more: Experts say brick-and-mortar retailers could rebound post-pandemic – but only if they channel the e-commerce boom back to their physical outposts

The analysts identified 13 stores at the highest risk of defaulting, and most of them are apparel stores.

Rite Aid

Rite Aid store in Los Angeles

Rite Aid, the US pharmacy chain with 2,500 stores in 19 states, struggled amid the pandemic as fewer people came down with colds or coughs as they sheltered at home. The company cut its full-year forecast for 2021, and it has $1.5 billion in outstanding debt rated high risk. Moody’s said its competitive disadvantage and near-term maturities are putting it in danger of default.

Party City

Party City
Richard Drew/AP Images

“Debt-strapped” Party City eased its heavy burden last year when it announced a bond restructuring, Moody’s said. While the party retailer is still at risk of default because of ongoing challenges from low demand, the risk isn’t “immediate,” the analysts said.



Women’s clothing store Talbots is among apparel retailers at risk. The company is facing sector challenges, as many consumers have turned away from malls amid the pandemic. Talbots doesn’t have much cash on hand, and it’s debt is coming due soon, analysts said.


John Greim/Getty Images

Belk, a private apparel retailer with locations in 16 states, already marked the first bankruptcy of 2021. The Charlotte, North Carolina-based department store chain has struggled like other apparel retailers amid the pandemic. Plus, it has a lot of debt and not a lot of cash on hand.

Men’s Wearhouse

men's wearhouse ties.JPG
REUTERS/Mario Anzuoni

Men’s Wearhouse was among the long-struggling companies that defaulted in 2020, along with retailers like J.C. Penney and J. Crew. The formal apparel retailer was hit hard during the pandemic as people stayed at home and opted to wear comfy clothes instead of formal wear. Moody’s said the company’s outlook is currently stable, though it’s still at risk amid continued sector challenges.

Nieman Marcus

neiman marcus
Katie Warren/Business Insider

Neiman Marcus was also among retailers that filed for bankruptcy in 2020, as it was under “inexorable” pressure from the pandemic. The department store chain was “one of the highest-profile companies to succumb to bankruptcy” in 2020, analysts said, but it “emerged from Chapter 11 in September after shedding more than $4 billion of debt.” The company’s debt rating remains below investment-grade, however, keeping it at risk of default.

J. Jill

j. jill store
Jeffrey Greenberg/Education Images/Universal Images Group via Getty Images

J. Jill, owned by Jill Acquisition, restructured its debt in 2020, giving the company “additional time to recover from coronavirus-driven disruption in the apparel retail industry,” Moody’s said at the time. Though the women’s apparel retailer still has risky debt on hand with weak liquidity, Moody’s rated it at stable.

Shoes for Crews

shoe organizers container store
Shoe organizers. The Container Store

Shoes for Crews, owned by SHO Holding, extended the deadline for its debt maturity last year during the pandemic. Still, the maker of slip-resistant, safety footwear for workers is at risk of default, as it faces the continued challenges of the apparel industry and is strapped with debt.


Bills fans
Buffalo Bills fans in Orchard Park Stadium on January 9, 2021.

Outerstuff, the maker of major league sports apparel for youth, is one of the several retailers facing challenges as an apparel store. The private company is at risk of default as it has an “unsustainable capital structure at current levels of performance, small revenue scale, narrow product concentration primarily in licensed children’s sports apparel in North America with a small, but growing, adult and international presence, and reliance on licensing arrangements from several sports leagues for a significant majority of revenue,” Moody’s said in a March 26 analysis.

Nine West

Nine West

Nine West, owned by Premier Brands Group Holdings, filed for bankruptcy in 2018. It reduced debt and emerged from bankruptcy in 2019 and sold its Anne Klein trademark. Still, the retailer is at risk of default because of a drop in revenue during the pandemic, and “it will take some time for the company to demonstrate a sustainable turnaround in light of the ongoing challenges in key segments of its wholesale customer base and the overall global apparel environment,” Moody’s said in a March 29 note.

Service King

car mechanic, car repair, looking under the hood of a car
Michael Stuparyk/Toronto Star via Getty Images

Midas Intermediate Holdco, which owns Service King, has a lot of debt, and the bill is coming due. The Richardson, Texas-based car repair company has $1.1 billion in debt rated below investment-grade, Moody’s said.

99 Cents Only stores

99 cents only
Facbook/99 Cents Only

Dollar-store chain 99 Cents Only, which has 350 stores in four states, had distressed exchanges in 2017 and 2019. The discount retailer is at risk because of a competitive disadvantage and operational and execution issues, Moody’s said.


Frank McKenna/Unsplash

Boardriders, the maker of popular surfing, skateboarding, and snowboarding apparel brands like Billabong and Roxy, went bankrupt in 2015, and now it’s at risk of default again as the company faces sector challenges and a lot of debt amid the continued pandemic, Moody’s said. In the future, though, the analysts expect the company will see benefits from its acquisition of Billabong.

Read the original article on Business Insider

Rite Aid plunges 22% after cutting its full-year forecast as the drugstore chain saw fewer people getting colds and coughs

GettyImages 1268610237
  • Shares in Rite Aid fell 22% at the market open on Thursday after the company cut its full-year forecast.
  • A decline in cases related to cough, cold, and flu hurt the drugstore chain’s fourth-quarter sales.
  • Social distancing measures and a long winter impacted its fourth-quarter sales, the chain said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Rite Aid fell by as much as 22% on Thursday after the company said its full-year results would be undermined by declining numbers of people falling sick with colds and coughs.

The retail drugstore industry has been hit by a weak sales season, due to measures to curtail the spread of coronavirus, the company said. As a result of physical distancing, face masks, and use of sanitizers, Rite Aid said it saw a decline of nearly 37% in its cough, cold, and flu-related product categories.

Rite Aid revised its expected full-year earnings before interest, taxes and depreciation to between $425 million and $435 million, from a prior forecast of between $490 and $520 million.

“During the fourth quarter, our industry was impacted by a historically soft cough, cold and flu season, as well as the continued impacts of COVID on the deferral of elective procedures and related acute prescription volume and selling, general and administrative expenses,” president and CEO Heyward Donigan said in a statement.

Front-end same store sales, a key metric that determines how well existing locations are performing, fell 5.6% for the company’s fourth quarter that ended on February 27. The winter season also contributed to a slump in its supply chain and a drop in sales, Rite Aid said.

Rite Aid shares closed at $23.34 per share on Wednesday, but sank 22% to $18.28 per share at Thursday’s market open.

Read the original article on Business Insider

The CDC is reportedly eyeing a ‘promising’ partnership with Dollar General to bring vaccines to rural communities, and Target is expanding access to shots with in-store CVS clinics

dollar general
dollar general

  • The CDC is eyeing a potential partnership with Dollar General, USA Today reported.
  • Dollar General has locations within 10-15 miles of rural communities in 46 states, the CDC said.
  • Target is now offering vaccine doses through over 600 in-store CVS pharmacies in 17 states.
  • See more stories on Insider’s business page.

In the latest efforts to expand access to COVID-19 vaccines, the Centers for Disease Control and Prevention is reportedly looking a partnership with Dollar General to bring vaccines to rural communities, while Target and CVS are working together to expand the rollout in 17 states.

Target began providing vaccine doses on Wednesday in over 600 CVS pharmacies located inside its store locations, the company said in an emailed statement to Insider. Eligible people can find an appointment through CVS’s website.

Shots are available at store locations in Virginia, New York, Alabama, Texas, Louisiana, Arizona, Hawaii, Ohio, Florida, South Carolina, Maryland, Connecticut, Massachusetts, Rhode Island, New Jersey, California, and Pennsylvania, the retailer said in the statement.

Target added that, “as states open up vaccines for frontline and essential workers, we’ll work with CVS and others to offer vaccines to team members within our stores and distribution centers in the future.”

Separately, the CDC is looking into working with Dollar General to expand vaccine outreach to Americans in rural areas, USA Today reported on Tuesday.

“We’re exploring a promising collaboration with Dollar General stores, which have locations that include refrigeration capacity within 10 or 15 miles of our rural communities in all but four states,” CDC director Rochelle Walensky said Tuesday at Health Action Alliance’s National Business Summit, according to USA Today. Dollar General has over 17,000 stores in 46 states.

Dollar General did not immediate respond to Insider’s request for comment.

Dollar General was the first retailer to announce plans to pay workers to get vaccinated. In January, the discount store said it will offer all 157,000 employees four hours worth of pay if they get the vaccine.

In February, the White House announced that over 40,000 pharmacies nationwide are set to receive vaccine doses to give to eligible people for free per the rollout of the Federal Retail Pharmacy Program for COVID-19 Vaccination.

Last month, select CVS Pharmacy locations began offering around 570,000 COVID-19 vaccine doses in 17 states as part of the program. CVS administered over three million vaccines and 15 million COVID-19 tests nationwide by mid-February.

The pharmacy chains and retailers partnering with the government in vaccine distribution include Walgreens, Walmart, Rite Aid, Kroger, Publix, Costco, Albertsons, Hy-Vee, Meijer, and Winn-Dixie.

To date, 95.7 million vaccine doses have been provided to people in the US, according to Bloomberg’s COVID-19 tracker. An average of 2.17 million doses per day were administered this week, according to Bloomberg data.

Read the original article on Business Insider