With a quarter of this century behind us, we enter 2026 with hope and optimism for the new year. However, there are a variety of issues many retailers are grappling with, including a high debt load, how to use AI, shrink, inflationary pressures, tariffs and waning demand as affordability persists. With all this in mind, following are ten (10) retailers to keep an eye out for a potential bankruptcy filing in 2026.
- SAK’s – Luxury Slowdown. Reuters reports that luxury retailer Saks Global is planning to file for an imminent Chapter 11 bankruptcy. According to Bloomberg, the company is discussing a $1.25 billion debtor-in-possession financing package with creditors. The company unfortunately is saddled with significant debt from its merger with Neiman Marcus in 2024. Added to this is the general global slowdown in luxury sales, which could be key factors for a potential Chapter 11 filing.
- GameStop – The End of the Meme? The Motley Fool asks when was the last time you bought a video game from a local store, instead of just downloading it to your favorite console? The company has lost 73% of its meme stock value from its peak in January 2021 as of Dec. 17, 2025. Yahoo Finance reports GameStop’s core business continues to struggle. The company’s $821 million in net revenue was down 4.5% year-over-year, driven by a 12% decline in hardware and a 27% decline in software sales.
- Leslie Pools – Taking the Bankruptcy Dive? According to Seeking Alpha, a key component the company’s persistent revenue decline and diminished sales was last year’s unfavorable weather conditions. The company’s liquidity deteriorated with cash falling to $64 million and a worsening debt to equity ratio. Pool Magazine reports the company’s 1-to-20 reverse stock split in the Fall of 2025 was both to ensure the Nasdaq’s minimum bid price requirement to maintain the company’s listing and let investors know management was taking active measures to address financial standing. It is unclear whether these efforts by management and a better weather climate for 2026 will help avoid a restructuring.
- AMC – Is the Curtain Closing on Bankruptcy? MSN states that shares of iconic movie theater operator were down by more than 41% as of December 1, 2025. According to a recent posting by Macroaxis, the odds of distress is over 50%. These issues coupled with significant debt on the balance sheet and more people skipping theatrical experiences to watch movies in the comfort of their homes makes the theatre icon poised for bankruptcy proceedings.
- Carter’s – Children’s Apparel Retailer Shuttering Stores. Newsweek reports that America’s biggest baby clothes retailer is planning to close 150 stores nationwide and layoff hundreds. An October 2026 press release cites tariffs as a major factor in the restructuring plan. USA Today further notes that the company will reduce its product offerings by 20-30%. If these actions do not change the company’s finances, a bankruptcy may be the next step.
- Kroger – Bankruptcy on Aisle Five? The Street posts that the company will close three robotic delivery warehouses in Florida, Maryland, and Wisconsin and move orders from those locations to its stores and will use Instacart, DoorDash, and Uber Eats to reach customers, forcing a $2.6 billion write-off. The Sun cites Neil Saunders, a retail expert from GlobalData, who says the grocer is not doing enough to compete with the big chains like Walmart, Costco and Aldi. In the low margin grocer business, a bankruptcy may be a real possibility.
- Sportsman’s Warehouse – Yahoo Finance reports the outdoor specialty retailer shares fell 30% after the company warned of weakening consumer spending and significantly cut its full-year financial forecast, even though its third-quarter results met expectations. Guru Focus notes that the company continues to lower inventory levels and a reduce its debt. Still, its three-year revenue growth appears to be in the negative and it has an Altman Z-Score of 1.57, which places the company in the distress zone, suggesting a potential risk of bankruptcy within the next two years.
- Walgreens – Another Drug Store Bankruptcy? Private Equity Stakeholder Project notes that in August 2025, Sycamore Partners acquired Walgreens. It also cites that in the first quarter of 2024, 70% of large U.S. corporate bankruptcies involved private equity-owned companies. According to USA Today, the company continues its plan to close about 1,200 underperforming stores across the U.S. over a three-year period due to declining profits from low drug reimbursement rates and slow retail sales. Perhaps, there is a possible path to a bankruptcy restricting route that Rite Aid tried, but actually succeed.
- Outback Steakhouse – Bloomin’ Bankruptcy? According to Finance Buzz, the brand is struggling with a number of issues, including a slimmed down menu that cuts fan favorites, steep price increases on signature dishes, longer waits and lower service and a lack of consistency. Mashed reports that despite parent Bloomin’ Brands improving its finances in in 2025, analysts predict decreased foot traffic this year. Combined with closing of more than 30 stores in 2025, this steakhouse could be headed to bankruptcy court.
- Red Robin – Bye-Bye Birdie? The Sun notes the cash strapped gourmet burger restaurant continues to close stores. Although net losses improved compared to 2024, it still had a net loss of $13.2 million this year. MSN reports the company struggled with declining foot traffic and rising operational costs. Further, high labor costs, large restaurant footprints, and inconsistent same-store sales have weakened Red Robin’s financial flexibility. Without significant menu innovation or store closures, bankruptcy or large-scale restructuring remains a possibility.
Stark & Stark’s Shopping Center and Retail Development Group regularly represent owners, developers, and/or landlords throughout the country in leasing, buying/selling, 1031 Exchanges, refinancing, and enforcement activities.
One of our Group’s specialties is bankruptcy representation/protection for owners, developers, and/or landlords nationally. Currently, our team is providing value-added services in several national Chapter 11 cases, including Rite Aid, At Home, American Signature (Value City) Lumber Liquidators, Stage Stores, Modell’s, and 24-Hour Fitness.
For more information on how Stark & Stark’s Shopping Center and Retail Development Group can assist you, contact Thomas Onder, Shareholder, at (609) 219-7458 or tonder@stark-stark.com. Tom writes regularly on commercial real estate issues and is an active member of ICSC. Tom is a member of ICSC’s Legal Advisory Council and a past Marketplace Director for ICSC’s Philadelphia region.
