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While the obvious states are being hit by retail bankruptcies (CA, TX, FL, NY), when we adjust by population it shows greatest damage in the states with the lowest (but creeping higher) unemployment.

By my math, 28 retailers have gone bankrupt since Jan 1, 2008. That’s no shocker to anyone that has not been locked in a closet for the past year. But we tore through the number of stores affected by state for the companies that filed, and came away with some interesting call-outs…

1) If I were to ask 100 retail analysts which 5 states were most impacted by bankruptcies, I’d bet that 90 would say “California, Texas, Florida, New York, and Arizona.” Four out of five of these states made the cut. Arizona was shockingly low on the list at 44 out of 50. That one caught me by surprise. Number five was Pennsylvania. If Bon-Ton files, then PA would make it to number 2 or 3.

2) There are a thousand ways to shred apart this list. One of the biggest is that the most populous states will naturally have the most stores, and therefore the most closures. So I weighted the store count by state population, and the only one that made the list of top five with disproportionate impact relative to its population was California (no surprise). What is interesting is that the other states in the top ten include states such as North Dakota, Vermont, New Mexico, and Nebraska. These are also the states with the lowest – but steadily increasing -- unemployment rates (sub 4%). Could things get worse before they get better?

Zach Brown
Brian McGough