Looming Retail Bankruptcies?
Below is an excerpt from an article posted today at About.com.
There are two different groups of experts who agree with that position and are predicting that a second wave of economic fallout will impact the retail industry in the not too distant future.
Audit Integrity, a Los Angeles research services company, released the results of an independent corporate bankruptcy study which identified 20 major U.S. corporations that are at risk for filing bankruptcy in the next 12 months. If the Audit Integrity numbers are correct, the retail operations of Macy’s, Oshkosh, Rite Aid, Sprint Nextel, and Goodyear are in danger of following in the footsteps of Circuit City, KB Toys and Linens ‘n Things.
A different assessment done by commercial real estate investment firm Madison Marquette identified a separate list of U.S. retail chains at risk for bankruptcy in the not too distant future. The retailers at biggest risk on that list include Chico’s, Cost Plus World Market, Dillards, and Talbots.
Though both firms used different criteria that yielded different results, they both did reach one conclusion that is the same. More aftershocks of the Great Recession will be rumbling through the retail industry, and the magnitude of those aftershocks will probably not be minor. Though retail Chapter 11 activity has been relatively quiet in the past couple of weeks, it is likely that some well-known retail players still have a trip to bankruptcy court in their future.
Here is Audit Intergity’s list as published by Reuters:
* Advanced Micro Devices, Inc.
* Amkor Technology, Inc.
* AMR Corporation
* Apartment Investment and Management Co.
* CBS Corporation
* Continental Airlines, Inc.
* Federal-Mogul Corporation
* Hertz Global Holdings, Inc.
* Interpublic Group of Companies, Inc.
* Las Vegas Sands Corp.
* Liberty Media Corporation (Capital)
* Macy's, Inc.
* Mylan Inc.
* Oshkosh Corporation
* Redwood Trust, Inc.
* Rite Aid Corporation
* Sirius XM Radio Inc.
* Sprint Nextel Corporation
* Textron Inc.
* The Goodyear Tire & Rubber Company
I have highlighted the companies whose bankruptcies would have obvious impacts on the world of retail commercial real estate.
I don’t see this news upping investor demand for all of those Rite Aid’s on the market. There are tons of them listed at LoopNet right now – I get a few in my email every day as well. Come to think of it, there are quite a few Goodyear Tire stores on the market as well.
On another note, I am glad to have my instincts confirmed with Sirius XM Radio. They have been hounding me for months about renewing subscriptions for both of my cars. I asked the salesperson why I would consider renewing with a long-term contract when they (Sirius XM) were not going to be in business long enough to fulfill the contract. The salesperson had no answer for that one. They definitely need better sales training (and DVR-like functionality for radio programming) if they are going to stay alive.
