In 2019, 16 retailers in the Digital Commerce 360 Top 1000 and Next 1000 declared bankruptcy. Of those, 15 filed for Chapter 11 bankruptcy—which allows companies to reorganize their assets for debt consolidation, sometimes resulting in liquidation, acquisition or exiting bankruptcy—and one, IBuyOfficeSupplices, filed for Chapter 7 bankruptcy.
Bankruptcy is often the last effort for retailers trying to escape debt, but still allows creditors the opportunity to be repaid either through liquidation of the bankrupt retailer’s assets or through reorganization of a company.
Nine retailers in the Top 500 declared bankruptcy, with plus size apparel retailer FullBeauty Brands (No. 105) as the highest ranked. One retailer, floral retailer and wholesaler FTD (No. 162), was acquired by investment firm Nexus Capital Management after filing in June 2019, and Payless ShoeSource (No. 460) ceased operations in May 2019 after filing for Chapter 11 bankruptcy in February of the same year. IBuyOfficeSupplies (No. 833) also went defunct.
The majority of merchants filing for bankruptcy in 2019 were retail chains; no catalogue/call centers filed. Of the 16 retailers, eight were acquired, five are still operational, one was licensed/liquidated (Barneys New York was liquidated and assets sold off to Authentic Brands Group, which will license the rights to Saks Fifth Avenue), and two shuttered operations.
While combined web sales of the bankrupt retailers gradually grew over the last 3 years, the median growth rate of these companies has been steadily decreasing.