As the US faces an “apocalyptic” level of retail store closures, investors are left nervously wondering what retail brands are going to go down next.
The “retail apocalypse,” or the closing of multiple American retail stores since 2016, has hit the country’s financial market hard, and stores like Toys R Us were forced to file for bankruptcy. Multiple factors, from the rise of e-shopping to the squeeze on the middle class to the fallout from long standing company debt, have driven this trend, and some worry that it’s on track to get worse in 2018.
Moody’s Corporation, a company that tracks corporations’ credit ratings, said recently that almost 19% of the retail companies it rates are considered high-risk investments. Their lead retail analyst, Charlie O’Shea, recently told CNBC, “I think the early part of next year will be pretty bad … I think it will be tough,” Moody’s lead retail analyst. He worries that “highly leveraged” retailers won’t be able to compete with Walmart and Amazon’s low pricing.