This article was originally published in Forbes by Pam Danziger
February 18, 2026 | LINK
Bankruptcy Watch: Retailers Most At Risk After Saks, Francesca’s, Eddie Bauer And FAT Brands
Even against a backdrop of continued strong consumer spending, some retailers are weighed down by too much debt, weak cash flow or business models out of sync with changing consumer expectations, giving more agile competitors an advantage.
RapidRatings, which measures corporate financial health, has compiled a watch list of retailers most at risk of failing this year based upon two critical metrics ranging from 0 to 100 points:
- Financial Health Rating (FHR), the key predictive measure of a company’s financial stability to survive over the next 12 months
- Core Health Score (CHS), a medium-term measure of a company’s financial health independent of short-term shocks
An FHR and CHS of 40 or less are high risk—ratings of 20 or below are very high risk—and the major retailers that went under in 2025, such as Rite Aid, Joann, Big Lots, LL Flooring, Express and Container Store, had an average 26 FHR and 31 CHS.
High-Risk Retailers
Here are six major retailers that fall into the high-risk category. None of these companies responded to a request for comment:
Smaller Retailers At Higher Risk
RapidRatings executive chairman James Gellert says it’s too early to call whether 2026 retail bankruptcies will match or exceed last year’s lower filing levels, but he notes that over 90% of bankruptcies occur among companies that have an FHR score of 40 or below. And larger companies generally are better able to stay out of the high-risk category.
“What we are seeing in retail is consistent with a lot of other industries. A larger-sized company is able to plod through or even improve during more volatile economic times, where the smaller companies are being disproportionately hit,” he shared.
Across industries, what gets companies into trouble is high debt or failing to respond effectively to a fundamental shift in the market. Retailers are particularly vulnerable to the later, since consumer needs and wants shift rapidly as do their shopping habits. In that case, Gellert warns, “Just fixing the capital structure may not be enough to be a long-term solution.”
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RapidRatings recently provided Forbes with a “Retailers to Watch” list for 2026, spotlighting companies whose FHRs and key financial ratios indicate mounting pressure in today’s environment.
In addition to the companies cited above, the list includes Wayfair (FHR 27 / CHS 35), ASOS (FHR 31 / CHS 36), AMC Theatres (FHR 32 / CHS 27), Tillys (FHR 36 / CHS 33), Cato (FHR 37 / CHS 30), and Allbirds (FHR 38 / CHS 20).
Executive Chair James Gellert also shared his perspective on the retail landscape, outlining why bankruptcy could speed up over the coming year.
In his assessment, James pointed out that debt, high interest rates, and changing consumer habits could be the final nail in the coffin for retailers who have been hanging on – especially for private company retailers.
Recent analysis revealed that 36% of private retailers are at high risk for bankruptcy, compared to just 12% of their large public company counterparts. This is due to private retailers being typically underfunded and more vulnerable to financial stress.
RapidRatings’ FHR captures early warning signals an average of 2 years ahead of bankruptcy. In this environment, it is critical for companies to actively monitor the financial health of their supply chains and vendor ecosystems – especially their private suppliers. Reputations, operations, and profitability are all at stake.
