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After a Rash of Bankruptcies, Retailers Are in Fighting Shape for 2011.
Mar 1, 2011 ABF Journal Spence Mehl
Given what Spence Mehl calls “a bloodbath of bankruptcies” in the retail space in 2008 and 2009, last year brought surprisingly fewer bankruptcies than most had anticipated. And while bankruptcy still loomed heavily for nearly all the big chains in 2010, the difference was that retailers themselves executed their own top-to- bottom restructuring plans. But, Mehl warns, retailers aren’t out of the woods yet.
Back in 2009, analysts engaged in a lot of hand-wringing about the future of American retail. And why not? After all, it was a year in which a staggering 32 chains—some of which had been household names for years, if not generations—had filed for bankruptcy protection amid an economy that could only be described as disastrous. Given that 2008 had also seen a bloodbath of bankruptcies, it was natural to conclude that 2010 would be another docket-busting year for the bankruptcy courts. But while there were a few prominent filings last year—Blockbuster Video, A&P, Loehmann’s and Urban Brands among them—2010 brought surprisingly fewer bankruptcies than most had predicted. In 2008 and 2009, landlords had looked on in horror as major traffic-drivers like Mervyn’s, Circuit City and Linens ‘n Things shut off the lights and handed over the keys to their stores. Thankfully, no such nightmares awaited them in 2010.