Get All Access for $5/mo

These 11 Retailers Are Most Likely to File For Bankruptcy in 2023, According to a New Report Several well-known retailers already filed for bankruptcy in 2023 — now, a new report is highlighting the retailers most likely to follow suit.

By Madeline Garfinkle

Key Takeaways

  • A new report identifies several well-known retailers as the most at-risk for potential bankruptcy in 2023.
  • Debt levels significantly influence bankruptcy risk, with companies like Rite-Aid ($3.3 billion debt) and Joann ($1.1 billion debt) facing financial strain.

Opinions expressed by Entrepreneur contributors are their own.

Countless well-known brands are struggling to break even amid rampant inflation that is affecting consumer spending — and it's predicted to get worse.

In July, Moody's Investors Service said retail and apparel defaults are expected to rise from 6% to 8.6% in the next year due to weakening consumer spending. As a result, some big-name brands such as Bed, Bath & Beyond and David's Bridal have already filed for bankruptcy this year.

Now, as reported by Retail Dive, a new report by credit reporting agency, CreditRiskMonitor is identifying the other retailers most likely to fold this year through the company's Frisk score (a credit risk assessment that gauges the likelihood of a company filing for bankruptcy within the next 12 months).

The Frisk score operates on a scale from 1 to 10, with 10 being the lowest risk, and 1 the highest. If a company has a Frisk score of 1, it implies a substantial chance, ranging from 10% to 50%, of filing for bankruptcy within the next year.

Related: Overstock Is Now Bed Bath & Beyond, Website Redirects

To determine the Frisk score, CreditRiskMonitor used historical company data and bankruptcy occurrences from 2003 to 2013, with a dataset encompassing 9,600 businesses. Of the businesses assessed, the five most at risk of bankruptcy in 2023, with a Frisk score of 1 are:

  • Farfetch
  • Joann
  • Qurate Retail
  • Rent the Runway
  • Rite-Aid

Other vulnerable retailers, with a Frisk score of 2 (meaning their probability of filing for bankruptcy in the next 12 months falls between 4% and 10%) are A.K.A. Brands, Big Lots, The Container Store, Petco, Kirklands, and Vince.

What Causes a Retailer to Go Bankrupt?

While several retailers are grappling with financial woes, the biggest contributor in folding or not folding comes down to debt, David Silverman, senior director of Fitch Ratings' U.S. retail team, told Retail Dive.

"Abercrombie & Fitch and J. Crew actually had very similar operating stories," Silverman told the outlet. "These are mid-tier, mall-based department store brands that had lost their way a little bit. [J. Crew] ended up undertaking a number of distressed debt exchanges and ultimately filed for bankruptcy at the beginning of the pandemic. [Abercrombie] didn't really and still doesn't really have any debt."

Rite-Aid, for example, which has been subject to bankruptcy chatter amid news of hundreds of store closures and a lawsuit brought on by the Department of Justice regarding its stake in the opioid crisis, reported long-term debt of about $3.3 billion in its June earnings report.

Related: A Popular Drug Store Chain Is Nearing Bankruptcy as Opioid Lawsuits Mount and Financial Woes Deepen

Similarly, retail chain and fabric store Joann, which also has a Frisk score of 1, reported long-term debt of $1.1 billion in its August earnings report, as the company has been grappling with declining sales since the pandemic.

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

'The Work Just Fills My Soul': She Turned Her Creative Side Hustle Into a 6-Figure 'Dream' Business

Kayla Valerio, owner of vivid hair salon Haus of Color, transformed her passion into a lucrative venture.


6 Cost-Effective Ways to Acquire Brand Ambassadors

Boost your brand's visibility and credibility with budget-friendly strategies for acquiring brand ambassadors.

Making a Change

Mastering Resilience: Learn to Detach Mistakes from Your Self-Worth with Darrell Vesterfelt

A moment of crisis led to his partners asking him to step away from one of the businesses that he co-founded


Remove Unwanted Files from Your Work Mac Fast with This $32 Lifetime License

MacCleanse can help you safely and securely clean up your computer.

Growing a Business

This Nurse-Turned-Entrepreneur Saw the Needs of Underserved Communities Firsthand. Now, His Company Uses AI to Help Them.

Kwamane Liddell, the innovative founder behind ThriveLink, shares his entrepreneurial journey.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.