A recent report has predicted that some of the United States’ major retailers — including household names like Sears, True Religion and 99 Cents Only Stores — are at a high risk of going bankrupt over the next two years.
The Fitch Ratings report said the seven at-risk companies are Sears Holdings, accessory retailer Claire’s Stores, True Religion Apparel, Nine West Holdings, clothes retailer Rue21, 99 Cents Only Stores, and Nebraska Book Company.
“Most of the retailers at high risk of default are challenged by declining mall traffic, competition from online and other types of retailers, and/or a lack of a compelling product line,” researchers wrote, according to Business Insider. “Highly leveraged capital structures may become unsustainable in the face of these challenges.”
The 114-page report predicts that when the companies default, they will most likely be liquidated as it was found that retailers have almost three times the chance of liquidation after filing for bankruptcy than most other industries.
Fitch Ratings analyzed 30 retail bankruptcies for the purpose of the report, finding that almost half of these ended in liquidation.
There has been increased pressure on the retail business with the rise of e-commerce and competitive pricing chains like dollar stores and Walmart that are eating into the profits. Sears has been cutting down on its stores but maintained that its other venture — Kmart — is doing fine despite the recent spate of closings.
In a blog post Monday, CEO Eddie Lampert said “there are no plans and there have never been any plans to close the Kmart format.”
Kmart currently has just over 700 stores, down from about 1,300 in 2012, according to reports.