Retailers Most At Risk of Bankruptcy After Recent Filings

RapidRatings identifies high-risk retailers as consumer spending remains strong overall

Published on Feb. 21, 2026

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Despite a strong retail economy to close 2025, a string of recent high-profile retail bankruptcies, including Saks Global, Francesca's, Eddie Bauer and FAT Brands, has raised concerns about the health of the sector. However, experts say these bankruptcies reflect company-specific weaknesses rather than broader economic trends, as many retailers struggle with high debt, weak cash flow or outdated business models. RapidRatings has identified several major retailers at high risk of failure in 2026 based on their Financial Health Ratings and Core Health Scores, including Children's Place, QVC, Marley Spoon, Walgreens, Red Robin, and Sportsman's Warehouse.

Why it matters

While the overall retail sector remains strong, the recent bankruptcy filings highlight the challenges facing certain retailers, particularly smaller and more vulnerable companies. Understanding the financial health of at-risk retailers can help consumers, investors and the industry prepare for potential disruptions and identify opportunities for more agile competitors to gain market share.

The details

RapidRatings, which measures corporate financial health, has compiled a watch list of retailers most at risk of failing this year based on two key metrics: Financial Health Rating (FHR), a measure of a company's financial stability to survive the next 12 months, and Core Health Score (CHS), a medium-term measure of financial health. Retailers with an FHR and CHS of 40 or less are considered high-risk, with scores of 20 or below being very high-risk. The major retailers that went bankrupt in 2025, such as Rite Aid, Joann, Big Lots, LL Flooring, Express and Container Store, had an average FHR of 26 and CHS of 31.

  • Retail ended 2025 up 4.2% to $6.4 trillion, with December sales rising 4% year-over-year.
  • In early 2026, a string of retail bankruptcies occurred, including Saks Global, Francesca's, Eddie Bauer and FAT Brands.

The players

RapidRatings

A company that measures corporate financial health and has compiled a watch list of retailers most at risk of failing in 2026.

James Gellert

The chairman and CEO of RapidRatings, who says that over 90% of bankruptcies occur among companies with a Financial Health Rating of 40 or below.

Neil Saunders

The managing director of GlobalData, who noted that December 2025 actually posted its highest level of overall retail growth since 2022, despite reports of flat seasonally-adjusted sales.

Children's Place

A nearly 500-store children's clothing retailer that has a Financial Health Rating of 19 and a Core Health Score of 31, putting it in the high-risk category.

QVC

The television shopping channel that is reportedly in confidential talks to restructure debt through a potential Chapter 11 bankruptcy, with a Financial Health Rating of 21 and a Core Health Score of 23.

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What they’re saying

“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.”

— James Gellert, Chairman and CEO, RapidRatings (Forbes)

“Just fixing the capital structure may not be enough to be a long-term solution.”

— James Gellert, Chairman and CEO, RapidRatings (Forbes)

“The reported December flat retail sales were based on seasonally-adjusted numbers, a 'highly misleading and inaccurate way of assessing performance'.”

— Neil Saunders, Managing Director, GlobalData (Forbes)

What’s next

RapidRatings will continue to monitor the financial health of retailers, and industry experts will be watching closely to see if 2026 bankruptcy filings match or exceed the lower levels seen in 2025.

The takeaway

While the overall retail sector remains strong, the recent bankruptcy filings of several high-profile companies highlight the challenges facing certain retailers, particularly those with high debt, weak cash flow or outdated business models. Understanding the financial health of at-risk retailers can help consumers, investors and the industry prepare for potential disruptions and identify opportunities for more agile competitors to gain market share.