The number of retailers filing for bankruptcy is increasing, and the sector’s outlook remains unclear, experts say.
In a report issued in last month, rating agency Standard & Poor’s Corp. said New York-based J. Crew Group Inc.’s bankruptcy “should not come as a surprise. … Which retailers will survive the coronavirus pandemic in some shape or form is the big question.”
Sarah McGowan, a senior vice president in Marsh LLC’s U.S. property practice in New York, said, “Some retailers are struggling already, while some are doing really well. In a few months, we might see how it’s going to shape up, whether we open the economy or not.”
Retailers are “clearly hurting under the current circumstances,” said Gary Marchitello, chairperson of Willis Towers Watson’s North American property team.
Mr. Marchitello said, “It would appear there’s going to be a fair amount of bankruptcies.” He added he hopes more of these will be Chapter 11 reorganizations rather than liquidations.
“The rest depends on when the economy opens up again,” he said.
In the post-COVID-19 environment, “human interaction is going to have to be much more limited,” said Helen D. Reavis, a partner with Reavis Page Jump LLP in New York, whose practice includes corporate operations and brand management.
Retailers that “rethink the theory behind the customer experience will have an edge in terms of property insurance,” she said.