Yes, I know, another post about
bankruptcies, but to say that Q1 2009 has been notable would understate the
obvious. As it relates to bankruptcies there are two points of interest that we
take note of in each filing, the companies that file and the often overlooked
creditors who have capital at risk. Given the flurry of activity over the last
three months, we thought it would be helpful to review the quarter in
aggregate.
YTD there have been 8 retailers file for bankruptcy. As a point of reference, over the last ten years there have been up to 22 retail bankruptcies in a single year only twice, in 2001 and 2008 and so far we are on pace to top that by nearly 50%. With the number of filings mounting, it’s important to keep track as small increments can add up quickly for creditors who find themselves at risk in multiple bankruptcies. Some notables from the list creditors:
Columbia and Quicksilver have the
unfortunate distinction of being the only companies with capital at risk in
three separate bankruptcy filings. Given that consensus estimates are $0.07 and
$0.05 respectively, a couple pennies are worth noting even though we have COLM
earning in the range of $0.20 in Q1.
Other creditors exposed by
multiple filings include Warnaco and Hanesbrands albeit with no more than a
$0.01 at risk.
Are these totals enough to sound the alarm on any of our creditors that they too may soon fall victim to the same fate, not just yet. But we’ll be keeping track and let you know if that changes.
Casey Flavin