The real reason retail bankruptcies are surging

Retail bankruptcies are on the rise — here are the key factors behind the collapse.

Transcript

00:00You have a softening of the consumer paired with some very high competition.

00:03We know a lot of these names lose out to the big box retailers.

00:07It's those big box names that are able to negotiate on prices, that are able to move manufacturing,

00:13that are able to absorb some of the higher cost of tariffs,

00:15although we've seen many say, even Walmart, as big as it is, saying they're going to pass down on the consumer.

00:21So you have to have the right product mix and a brand that consumers are willing to still spend at,

00:27but you also have to have that negotiating power, you have to have the ability to move manufacturing,

00:32and so I think that's why you're seeing a lot of the big guys in the space doing very well,

00:37and that makes it hard for some smaller entrants.

00:40If they can't absorb tariffs or negotiate with suppliers, it's going to be difficult for them,

00:46and I don't know that the consumer has the wherewithal to sustain some of the price increases we're hearing about.

00:53That, you know, even Steve Madden said they would increase prices,

00:58and, you know, they gave an example of how expensive certain shoes could get,

01:03and I'm not sure that the consumer is going to want to spend that much more on discretionary items.