Signs of distress at retailers Big Lots Inc., Express and the Children\u2019s Place could spell more trouble for the reeling commercial-real-estate market, according to Barclays Research.<\/p>\n
Corporate bankruptcies have been rising since a pandemic lull, with filings in January touching the highest level since 2020, according to Epiq, a bankruptcy-services company, and Barclays.<\/p>\n
In February, discount retailer Big Lots Inc. While corporate bankruptcy filings remain low from a historical perspective, the uptick comes as the buffer of low pandemic interest rates evaporates, along with government stimulus payments. <\/p>\n <\/p>\n Bankruptcy filings can be painful for the commercial-real-estate industry, since tenants can reject their leases in bankruptcy court, a process office-sharing company WeWork has been pursuing<\/a> since its November filing.<\/p>\n See:<\/strong> WeWork files for bankruptcy, capping a stunning downfall<\/a><\/p>\n \u201cThe Children\u2019s Place tenant tends to occupy smaller stores and has already significantly curtailed its physical stores, limiting the future impact of a bankruptcy filing,\u201d according to the research team at Barclays led by Lea Overby. <\/p>\n However, Big Lots, with its estimated 1,400 stores, and Express pose more of a risk to investors in commercial-mortgage bonds, the Barclays team wrote in a Wednesday client note. Express has more than 600 stores, including its menswear Bonobos locations. <\/p>\n Big Lots, Children\u2019s Place and Express didn\u2019t immediately respond to requests for comment.<\/p>\n Commercial-real-estate values have already fallen 21% from their pandemic peak, while a growing wall of maturing debt is bearing down on borrowers and lenders against a backdrop of higher rates. Write-offs on soured loans look to be a growing risk for regional and community banks.<\/p>\n Read: <\/strong>Regional-bank stocks are back under pressure as investors get \u2018a dose of reality\u2019 about obstacles to cutting rates<\/a><\/p>\n Big Lots shares were up about 3.3% on Wednesday, while shares of Children\u2019s Place were roughly 28% higher<\/a> and shares of Express were up about 7.1%, according to FactSet. Shares of all three are down between 37% and 75% on the year.<\/p>\n See: <\/a><\/strong>Big Lots\u2019 stock tumbles as Wall Street\u2019s top bear sees more than 80% downside<\/a><\/p>\n<\/p><\/div>\n<\/div>\n
\n BIG,
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\n reportedly began looking for financing<\/a> after years of losses and waning liquidity, according to Bloomberg News. Kids\u2019 apparel company Children\u2019s Place Inc.
\n PLCE,
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\n also began exploring new financing<\/a>, while fashion retailer Express Inc.
\n EXPR,
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\n has been looking to restructure its debt<\/a> and potentially file for bankruptcy, according to the Wall Street Journal.<\/p>\n\n <\/div>
January saw the most bankruptcy filings by corporations since 2020, signaling a growing threat to commercial real estate.<\/h4>\n<\/figcaption><\/figure>\n<\/p><\/div>\n