A Look At America’s Retail Apocalypse In Charts

Posted: November 9, 2017 in Uncategorized

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Recovery? What recovery? The wave of retail failures is a direct hit to an industry that is the largest employer of young Americans and those at the low end of the income spectrum

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While everyone likes to point the finger at Amazon, the growing retail apocalypse in America can’t be tied to just one catalyst. Certainly, there is no doubt that Amazon is taking a toll on brick-and-mortar retailers but massive excess capacity, perpetually over-levered capital structures and a constant lack of capital investment have undoubtedly helped accelerate the decline.

As Bloomberg points out today, up until this year, struggling retailers have largely been able to avoid bankruptcy by refinancing to buy more time. Alas, as evidenced by the Toys “R” Us bankruptcy, investor demand for retail debt has waned of late resulting in a whole slew of recent retail failures.

Meanwhile, investor distaste for retail debt comes just as the industry faces a massive wave of maturities over the next five years.

Making matters more difficult is the explosive amount of risky debt owed by retail coming due over the next five…

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Comments
  1. The retail industry might have been the greatest beneficiary of a $15 minimum wage, because higher wages increase consumption. A few stores tried to pay their employees better, like The Gap, but if their competitors don’t do the same… it can be a handicap. Wages need to be raised overall, in order to boost the economy… and raise the standard of living.

    The real reason wages have stagnated is because wealthy elites feel needy — they just need more; have to fill those off-shore bank accounts.

    • Agree with you, JoAnn. Our growing inequality is not sustainable. The empty, decaying malls across the country are our ghosts of Christmas Past.

    • Excellent point, JoAnn. I didn’t really think of that – how a living wage could have helped retailers.I guess that’s the big problem overall with capitalism – there is an expectation that corporate elites will behave logically based on their best long term interests. But they never do. Ironically Adam Smith warned that might happen over 200 years ago. In the Wealth of Nations, he warned capitalist owners that they needed to focus on creating employment rather than accumulating luxuries. Too bad they didn’t listen.

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