Usually the holidays are a time for goodwill, cheer and eggnog. And for most retailers, the season is when they generate most of their profits for the year, pushing them into the black. Unfortunately for some legacy brick-and-mortar stores synonymous with the flailing suburban shopping mall, goodwill and cheer and the consumer dollars that tend to accompany such sentiments may not be in abundance this year.
Struggling retailers who are likely to have turnarounds at the top of their wish list, but are more in danger of finding coal in their stockings come Christmas morning, include the likes of Wet Seal Inc. (WTSL) , dELiA*s Inc. (DLIA) , Cache Inc. (CACH) and Body Central Corp. (BODY) , according to numerous industry sources and observers.
None of the four companies responded to requests for comment.
One industry source not only supported the idea that the four companies might not make it through the holidays, but added: "I wouldn't limit it to them — I think any specialty retailer is going to be struggling."
That person also suggested that retailers might go through wind-down liquidations in the coming months, and that the recent bankruptcies of Coldwater Creek Inc. and Alco Stores Inc. could serve as models.
Women's clothing retailer Coldwater Creek, for example, filed for a pre-negotiated Chapter 11 bankruptcy on April 11 with a plan to liquidate its assets.
Private equity firm Sycamore Partners LLC acquired the Sandpoint, Idaho-based company's brand and intellectual property assets, while a joint venture of Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC purchased the other assets for $161 million, and have been liquidating them since May.