Sears Holdings Corp., parent company of Sears and Kmart stores, tops the list of U.S. retailers "most vulnerable" to default on their debt over the next year, according to S&P Global Market Intelligence, which ranked retailers by the percentage likelihood of default occurring (report here.)
The five "most vulnerable public U.S. retailers," and the chances they'll stop paying what they owe by April 2018, are, according to S&P:
• Sears Holdings (SHLD): 24 percent — credit rating is CCC+ with a "negative outlook." Its Sears Hometown and Outlet Stores (SHOS) affiliate: 6 percent, rated B-.
• DGSE Companies Inc. (DGSE), chain jewelers: 15 percent; "implied credit score" CCC+.
• Bon-Ton Stores Inc. (BONT), department stores: 10 percent; based in York, Pa.; "implied credit score" CCC+.
• Bebe Stores Inc. (BEBE), women's apparel: 10 percent; "implied credit score" CCC+.
• Destination XL Group Inc. (DXLG), big and tall men's apparel: 8 percent; "implied credit score" CCC+.
Sears has run down since billionaire buyout investor Eddie Lampert, who also controlled Kmart, bought control of the Chicago-based retail giant in the mid-2000s. Lampert has paid himself hundreds of millions of dollars by selling Sears assets and has protected himself from a possible bankruptcy by acquiring control of much of the company's collateral, writes USA Today's Nathan Bomey here.