The Backroom: The looming threat of retail bankruptcies
Author: Kaarin Vembar
Source: Retail Dive
Welcome to The Backroom, your window into what goes on behind the scenes as the Retail Dive team covers the stories and trends reshaping retail. You can check out all our podcast episodes (past and present) here and listen on iTunes or Stitcher.
This fall, reporter Ben Unglesbee set out to compile a list of distressed retailers at risk of bankruptcy. It's a practice Retail Dive has done since the summer of 2017, and bankruptcy as a topic is an ongoing story the team researches, investigates and discusses.
To compile the list, our team uses data provided by CreditRiskMonitor, which analyzes companies in terms of their FRISK score — a measurement based on factors including credit rating, stock volatility and other financial metrics to determine the probability of a bankruptcy filing. Eight to 12 retailers are typically revealed to be at risk. This year, 28 retailers were on the list.
The results were so surprising that Unglesbee went back to CreditRiskMonitor to double check that there were no changes in FRISK methodology. There weren't.
As reporter Daphne Howland looked at the list, she was curious as to why so many of the named retailers were apparel companies. The results fed into her reporting about how specialty clothing businesses are getting hit especially hard as the industry puts up record numbers of store closures.
On this episode, Unglesbee and Howland discuss the reporting behind the list, the apparel industry's reckoning and personal experiences when shopping for clothes.
The Backroom with Retail Dive is a sponsored podcast. The sponsor has no influence over Retail Dive's coverage, and content does not reflect the views or opinions of the sponsor's employees.