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As Online Shopping Grows, Retail Becomes Even Riskier According to S&P

October 2, 2017
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After news came out last week that Amazon would be expanding their business in the food sector and home AI, cementing online shopping’s position as the way of the future, retail was hammered yet again.

CNBC reports that “the percentage of U.S. retailers with high-risk CCC ratings has doubled since the beginning of the year, according to a new report by S&P.” The rating means that the sector is “vulnerable to nonpayment,” meaning that many of these companies are now living hand to mouth.

After major bankruptcies such as Toys R’ Us plagued the retail industry recently, this new rating by Standard and Poor’s is a disaster.

Names on the S&P’s CCC credit list include The Neiman Marcus Group and Bi-Lo Finance, the owner of supermarket chain Winn-Dixie Stores.

Thing were made even worse by a report from The Street which points to difficulties in Nordstrom’s proposed privatisation.”Banks have reportedly been reluctant to fund the deal due to expectations for a weak holiday season.”

With companies failing to assert their control over their own destinies and the looming threat of bankruptcy hovering over much of the industry, investors should think long and hard when investing in retail.

For CNBC’s article of S&P’s downgrade of retail, click here.

For The Street’s article on Nordstrom’s difficulties going private, click here.

For S&P’s ratings system, click here.

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