The advancement of technology and the new habit of consumers to rely on it to make their purchases without the need to leave home, has made that Amazon has become the e-commerce giant, to the detriment of some retailers that until this year they still operate in the United States at a forced march and with the enormous risk of stopping doing so in 2023.
This is how Bed Bath & Beyond, Rite Aid and Party City top the list of some traditional stores that could succumb if a recession in the economy stops, since that would precipitate their demise.
According to information from the USA Today newspaper, this chain of retail stores founded in 1971 reported last month that it would close about 150 stores and lay off 20% of its workers with the goal of saving $250 million.
This measure allowed it to obtain financing of $500 million dollars with the promise that it would stop selling its own brands and give priority to national brands, since during the second quarter it had a net loss of $366 million dollars.
In addition, its sales fell 26%, which precipitated the cost of its shares from $30 dollars to only $4 in the financial market.
Although the leading retailer in the sale of sewing materials, as well as handicrafts, benefited during the pandemic, as people bought their products to entertain themselves during the most complex days due to the registered emergency, currently its future does not paint anything well after that In its balance sheet for the second quarter, it registered a net loss of $56.9 million dollars and this makes it difficult for it to be able to face its long-term debt of $1.100 million dollars.
The pandemic and the confinement that it led to for more than a year interrupted all the activity of this company oriented towards large celebrations and festivities, which meant having shelves full of supplies, but with zero income.
Last week, Party City announced that it would cut 19% of its corporate staff to try to save $30 million, because the price of its shares fell from $7.01 dollars to just ¢91 cents.
The debt of almost $3 billion dollars with which it opened the year and the losses of more than $200 million dollars projected at the end of 2022, have the pharmacy chain with one foot in the hole.
As if that were not enough, the Wall Street Journal reported that close to 50% of this company’s debt has floating interest rates, which is catastrophic for its future.
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Source: La Opinion
