Six Months Into COVID, the Fate of the Consumer Economy Still Hangs in the Balance
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2020年8月25日
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While financial markets continue to party like it’s 1999 (quite literally), the restructuring market is looking more like 2009 with each passing month. This scenario was inconceivable just a few months ago, but the unrelenting monthly toll of filings and defaults since the arrival of COVID-19 now leaves us with the impression that the sharp upturn in events of corporate failure has staying power beyond the duration of the pandemic.
Last month we commented that annual filings would likely exceed 200 in 2020 but it now seems that 250 is within sight given another strong month for filings in July—a total that would begin to rival the 300 filings racked up during the Great Recession of 2008-2009.
The retail and energy sectors continue to lead the charge, as they have for several years—collectively accounting for 46% of large Chapter 11 filings since COVID struck here. For retailers, the pandemic and accompanying shutdown have been the final blow for many struggling store-based businesses, as millions of housebound consumers migrate further to the online channel for their shopping needs.
Financial markets could hardly care less about the surge in retail bankruptcies and store closings and are focused on the bigger picture—resurgent growth in retail sales. Many market commentators and economists point to robust retail sales in recent months as the most compelling evidence of a V-shaped recovery.
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2020年8月25日
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Global Co-Leader of Corporate Finance & Restructuring