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The Struggle Is Real For Malls As Teen Retail Bankruptcies Pile Up

The Struggle Is Real For Malls As Teen Retail Bankruptcies Pile Up - American Eagle Outfitters, Inc. NYSE:AEO, Amazon.com, Inc. NASDAQ:AMZN

The world seems to be changing faster than teen retailers can adjust. A number of popular brands have already declared bankruptcy, and several others could be next.

Since the beginning of 2015, four major teen retailers have opted for bankruptcy:

  • Seal123 Inc OTCWTSLQ (Wet Seal) filed for bankruptcy on January 15, 2015 after the company closed two-thirds of its stores and struggled with slumping sales.
  • American Apparel Inc OTCAPPCQ opted for bankruptcy on October 5, 2015 when the company finally succumbed to its crippling debt load and sharply dropping sales.
  • Pacific Sunwear of Caliornia, Inc OTCPSUN also experienced the perfect storm of falling sales, huge debt and high rent costs and finally threw in the bankruptcy towel on April 7, 2016.

Teen retailers have been a casualty of what many inventors see as a secular shift in teen buying habits. Not only are e-commerce names like Amazon.com, Inc. AMZN 0.72% stealing share from brick-and-mortar mall retailers, today’s teens seem more interested in spending their money on gadgets than phones.

Unless they can crack the code on how teen retailers can survive in the modern shopping world, a handful of other names could be the next in line for bankruptcy. In the past 10 years, shares of American Eagle Outfitters AEO 0.85% and Abercrombie & Fitch Co. ANF 0.8% are down 26.9 percent and 65.2 percent, respectively.

© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.