From 2020 through 2025, retail lived through a compressed decade of change. The pandemic rewired buying habits, inflation reshaped price sensitivity, and higher rates exposed capital structures that only worked when money was cheap. The result was a retail landscape where demand became less predictable, promotions came roaring back, and leveraged balance sheets turned operational stumbles into solvency events.
1) Buyer Preferences: less loyalty, more value, and higher expectations
The clearest theme of this cycle is the “value reset.” Even as consumer confidence improved at points, many households stayed cautious, rotating spending toward essentials and looking harder for deals. (McKinsey & Company)
Gen Z is a good example of the new paradox: spending tightening, expectations rising. PwC’s transaction-based analysis found Gen Z spending down in early 2025, especially in categories like apparel and electronics, even as the cohort still expects strong experiences and convenience. (PwC)
A related shift is the steady rise of private label and “trade down” behavior, where shoppers substitute cheaper products rather than buying less overall. (Innova Market Insights)
What it changed inside retail
- More volatile sell-through and heavier reliance on promotions
- Less forgiveness for service misses (shipping times, out-of-stocks, returns)
- Increased pressure to justify price with experience (especially department stores) (Reuters)
2) Leveraged Debtors: when the capital structure becomes the story
A big chunk of distress in this window was not just “weak sales.” It was weak sales plus leverage plus refinancing cost.
Credit markets also shifted from growth to refinance mode. Ratings agencies have been flagging elevated refinancing and vulnerability for lower-rated borrowers, a backdrop that matters for retail because many chains sit in that ratings neighborhood. (S&P Global)
A real-time illustration is Saks Global, built from a heavily leveraged merger strategy, then pressured by losses, missed payments, and vendor disruption. (Reuters)
3) Distressed Retailers: Why Chapter 11 kept showing up
The list of major retail bankruptcies across 2020–2025 is long and cross-category. Retail Dive maintains a running timeline that makes the pattern obvious: the pressure wasn’t isolated to one niche, it was broad and recurring. (Retail Dive)
By 2025, the “second-time filer” phenomenon also became more visible, with restructurings that did not permanently fix the operating model meeting a harsher rate environment later.
Two examples from 2025:
- Forever 21 (U.S. operating company) filed again with roughly $1.6B in debt, and Reuters reported unsecured creditors like suppliers were projected to recover 3% to 6% under a proposed plan. (Reuters)
- JOANN filed in 2025 amid constrained inventory and ongoing retail headwinds, per Fortune’s reporting. (Fortune)
4) Retailers to Watch: “risk signals,” not predictions
No list can predict Chapter 11. But certain signals tend to cluster before it: missed debt payments, vendor tightening, downgrades, expensive secured refinancings, and shrinking liquidity.
A short watchlist based on publicly reported signals:
Saks Global (department store/luxury)
Reuters has reported missed payments, losses, and mounting concern around potential restructuring, with separate reporting indicating preparations for a possible Chapter 11 filing. (Reuters)
Kohl’s (department store/value)
Kohl’s has faced multiple ratings downgrades and heightened scrutiny on leverage and maturities. S&P noted the retailer refinanced notes maturing in 2025 with a 10% senior secured note, a detail that shows how costly refinancing can get when markets demand protection. (S&P Global)
5) The Takeaway for Suppliers and Credit Teams
Retail’s 2020–2025 lesson is less about one trend and more about the combination:
- Consumers became more price-sensitive and less loyal (Deloitte)
- Promotions returned and demand got choppier
- Leverage got punished as rates rose and refinancing got expensive (S&P Global)
When those forces overlap, the risk shifts from “slow pay” to “sudden event.”
FAQ
Why did retail bankruptcies keep happening even after the pandemic recovery?
Because operating recovery didn’t automatically fix balance sheets. Higher rates and tougher refinancing terms raised the bar for survival, especially for lower-rated borrowers. (S&P Global)
What are the most common warning signs before a retail filing?
Missed debt payments, vendors tightening terms or pausing shipments, rating downgrades, expensive secured refinancing, and liquidity warnings. Recent Reuters reporting on Saks highlights several of these dynamics in one case. (Reuters)
Are department stores “done,” or just changing?
Many are pivoting toward experience-driven strategies to defend foot traffic, but the sector remains under structural pressure from brands going direct and e-commerce competition. (Reuters)
Conclusion
Concerned about receivables exposure in the retail channel? Ask about trade credit insurance.
Disclaimer:
This blog post is meant to be informative and provide helpful tips and insights into credit insurance policies. It is not meant to supersede any policy requirements. Please consult your credit insurance policy for all requirements including claim filing deadlines and required documentation.
Since 2004, Securitas Global Risk Solutions, LLC (“Securitas”) has helped clients develop credit and political risk transfer solutions that provide value on numerous levels. As an independent trade credit and political risk insurance brokerage, Securitas is focused on developing comprehensive solutions that meet the needs of clients, ensuring a complete understanding of policy wording and delivering excellent responsive service.
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