15 Companies Nearing Bankruptcy
With big names such as Circuit City and Linens n’ Things going bankrupt investors have to wonder, who is next?
The economy has only continued to worsen and while some companies are doing better than others one of the overlooked factors is financing. Renewing debt during these troublesome times is no easy task for any corporation.
The U.S. News provided 15 names of companies today on Yahoo Finance that could be heading for bankruptcy. We’ve included 8 of the 15 below in no particular order (shortened for length):
1. Rite Aid (RAD)
After taking over several key competitors Rite Aid has, “a huge debt load that makes it the most leveraged drugstore chain in the U.S.” Also, “Management has twice lowered its outlook for 2009.”
2. Claire’s Stores
“cash flow has been negative for much of the past year and analysts believe Claire’s is close to defaulting on its debt. A horrible retail outlook for 2009 offers no relief…”
3. Chrysler
“Of the three Detroit automakers, Chrysler is the most endangered, with a product portfolio that’s overreliant on gas-guzzling trucks and SUVs and almost totally devoid of compelling small cars.”
4. Realogy Corp.
“It’s the biggest real-estate brokerage firm in the country, but that’s a bad thing when there are double-digit declines in both sales and prices…”
5. Sbarro
“It’s not the pizza that’s the problem. Many of this chain’s 1,100 storefronts are in malls, which is a double whammy…”
6. Six Flags (SIX)
“…if consumers aren’t spending during the peak summer season, that could imperil the company’s ability to pay debts coming due later this year and in 2010.”
7. BlockBuster (BBI)
“The video-rental chain has burned cash while trying to figure out how to maximize fees without alienating customers.”
8. Krispy Kreme (KKD)
“The company has cut costs and closed underperforming stores, but still hasn’t earned an operating profit in three years.”
Other names on the list include Sirius Satellite Radio (SIRI), Trump Entertainment Resorts Holdings (TRMP), BearingPoint (BGPT), Dollar Thrifty Automotive Group (DTG), Realogy Corp, Station Casinos, and Loehmann’s Capital Group.
To hold out until the recession can pass may prove to be to daunting a task for some of the above companies. While some have been more hurt by poor business decisions and old models others simply need the consumer to start spending once again. Regardless the clock continues to tick…
Source:
15 Companies That Might Not Survive 2009
Rick Newman, U.S. News
Yahoo Finance, February 6, 2009, 11:53 am EST
