In the age of the Internet, it’s adapt or die for many brick-and-mortar retailers. Sears looks like it’s closer to the latter and here’s why. USA TODAY


The past year has been a bleak one for many retailers.

Over 20 retail chains — including Radio Shack, Toys R Us, and HHGregg — filed for bankruptcy, and some were liquidated.

Things are not likely to get better in 2018. They may even be worse.

“I think the early part of next year will be pretty bad … I think it will be tough,” Moody’s lead retail analyst Charlie O’Shea told CNBC.

The 17 companies below all struggled in 2017. Many of them closed stores, and some have even filed for bankruptcy at least once before. These aren’t the only retailers struggling as we head into 2018, but they are some of the most prominent.

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Sears Holdings

Leaving Sears Holdings (NASDAQ: SHLD) off a list of companies not likely to survive 2018 would be like omitting Tom Brady from a discussion of all-time great quarterbacks. Sears has been moving in reverse for years, losing money and closing stores at a remarkable rate.

Sears has survived only by selling off assets and borrowing money from funds connected to its CEO, Edward Lampert. That carousel may stop soon, as the company is running out of things to sell. It currently has $8.1 billion in assets and $12 billion in liabilities as of the close of Q2 2017. With profits remaining a distant dream, it’s hard to see Sears making it another year.

ALSO READ: Which Will Die First, Sears or J.C. Penney?

Toy R Us

Toys R Us filed for bankruptcy back in September. It also secured $3.1 billion in bankruptcy financing from a group of lenders, though, which suggests that the company will emerge from bankruptcy — but it’s not a guarantee.

The problem is that the climate in which Toys R Us operates has not improved. Some of its brick-and-mortar rivals are selling toys at deep discounts, drawing customers to their stores in hopes that they’ll buy higher-margin products as well. Meanwhile, online retailers can often sell toys for lower prices while still turning a profit.

Going forward, the toy retailer has a plan to turn its stores into interactive destinations. That’s what it should have been doing for years, but the plan may or may not work in such a competitive environment.

J.C. Penney

J.C. Penney (NYSE: JCP) isn’t in the same dire straits as Sears. That, however, is sort of like saying that someone with one brain tumor is in better health than someone with two.

CEO Marvin Ellison has made some bold moves, and comparable-store sales have been increasing, but the chain continues to lose money. In fact, despite the rise in sales, the chain’s loss grew to $128 million in its most recent quarter from $67 million in Q3 2016.

ALSO READ: 2 Signs That J.C. Penney’s Management Needs Help

Claire’s stores

In 2017 Claire’s appeared on a lot of lists of companies not likely to survive the year. Its condition has improved slightly: In the most recent quarter, overall sales rose 0.8%, while same-store sales grew by 1.1%.The problem is that the chain is in a precarious financial position. As of Oct. 28, it had cash and cash equivalents of only $25.8 million, down $5.4 million from the previous quarter. It also had $71 million drawn on its credit facility, putting the chain underwater and vulnerable to a downturn in sales.

J. Crew

A number of companies on this list are struggling because foot traffic has dropped at many shopping malls. J. Crew, whose stores are generally located in malls, is feeling the effects of this trend. In Q3 the chain’s overall sales fell 5%, while comparable-store sales dropped by a gut-wrenching 9%. In addition, the chain’s net loss increased to $17.6 million, up from $7.9 million during the same quarter a year ago. The retailer suffered a net loss of $161.6 million through the first nine months of fiscal 2017, up from $24.6 million during the same period in 2016

Charlotte Russe

Another mall-based retailer, Charlotte Russe has struggled partly because of lower foot traffic and partly because some clothing sales have moved online. The chain, which appeared on a list of at-risk retailers by Fitch earlier this year, caters to a younger clientele. That audience has been the most willing group to take its business to digital sellers………….more here