As 2017 creeps into its final quarter, it is worth taking a look at the past 10 months and reviewing what industries have experienced the most significant distress, at least from the perspective of chapter 11 bankruptcy. The purpose of this exercise is not to trumpet the fact that certain industries were less affected, but rather to attempt to forecast the upcoming year and to plan accordingly.
Most prominently, both casual dining and retail appear to have fallen victim (or, continued to be victims) in 2017. With respect to casual dining, many have speculated that the impact of “millennials” has been the driving force behind worsening sales. Comparing against older generations, some claim millennials place more value on the concepts of “fresh” and “farm to table,” rather than strictly convenience, which has always been the backbone of casual dining. Many chain restaurants are attempting to adjust to the times, but the bevy of casual dining chapter 11 filings tends to weigh against the success of such adjustment.
Retail distress, on the other hand, is almost certainly the result of the increasing popularity of online shopping. While far from a unique thought, the ease of shopping from home or the office — 24 hours a day, 365 days per year — has proven to be enticing to consumers, drawing crowds away from malls and other shopping areas. Given the costs of traditional brick and mortar locations, including, among other things, rent and employee wages, worsening sales has a direct impact on the ability to operate a traditional location at a profit.
WHP’s Bankruptcy and Creditor’s Rights group continually monitors the distress environment, particularly chapter 11 bankruptcy filings, and is prepared to assist clients impacted by those industries experiencing heightened levels of distress.