Wave of store closures and retail bankruptcies in the US to benefit giants like Amazon and Wal-Mart

A wave of store closings and retailer bankruptcies in the US is due soon this year, as the industry deteriorates faster than analysts had expected a year ago, according to Credit Suisse Group.

The retail business’s “large and undeniable transformation” will crimp rents and vacancy rates this year, strategists Roger Lehman and Benjamin Rozyn wrote in a note on Thursday. Bonds backed by these loans are likely to weaken, they said.

Even if the just-ended Christmas shopping season was the best for retailers in a decade, according to early estimates, mall staples like Macy’s and JCPenney have not wowed investors with their results. Although those companies are far from bankruptcy, Macy’s said on Thursday it was closing 11 stores in early 2018.

Meanwhile, a few major retailers, including Amazon.com, Wal-Mart Stores and Home Depot, are expected to reap an oversized share of the industry’s gains.

Portions of CMBX 6 and CMBX 7, two commercial mortgage bond indices that investors often use to bet against retailers, may fall further this year, the analysts wrote. The junk-rated portion of CMBX 6 dropped about 12 per cent in 2017. January is usually the peak month for retailers’ bankruptcy filing, according to data compiled by Bloomberg Intelligence going back to 1981.