By Vakkas Dogantekin
ANKARA
In a possible watershed for the U.S. business landscape and economy, major retailers are increasingly filing for Chapter 11, the signature U.S. federal law for bankruptcy.
Among shopping giants that recently either filed for bankruptcy or chose to liquidate their businesses are Sears, David’s Bridal, Nine West, Claire’s, Bon Ton Stores, Mattress Firm, Toys R Us, and Brookstone.
The list is long: 16 U.S. retailers filed for bankruptcy or announced liquidations in 2018.
Some of these store chains, such as the 126-year-old Sears, survived the Great Depression that shook the world economy in 1929 only to see their fortunes fading in the 2000s.
While Sears is going through the high cost of finalizing the bankruptcy process, analysts are working to understand whether the march of failing retailers is a sign of change in the shopping habits of Americans or a vanishing middle class.
According to Business Insider magazine, Chapter 11 bankruptcies in 2018 jumped 63 percent from the previous year.
Though bankruptcies may spring from a variety of reasons, the sudden boom in the bankruptcy business raises questions about the strength of the American middle class amid stagnant wage growth and still-high medical bills.
Warning about prospects for the American economy and its budget deficit and debt in particular, Boston University economist Laurence Kotlikoff told MSNBC last September: “The evidence is in front of our eyes that we’re bankrupt, it’s not bankrupt in the future. It’s bankrupt right now.”
