Corporate bankruptcies in April hit their highest level in a year. And companies in the consumer discretionary category led the way in terms of filings.
Sixty six U.S. companies filed for bankruptcy in April, according to data from S&P Global Market Intelligence. That’s up from a revised total of 61 filings in March. Year-to-date, corporate bankruptcies are still below 2023 levels but the rate of filings has picked up since the start of the year.
“Fading hopes of lower interest rates are likely contributing to the increase in filings, as companies that may have held out hope for rate cuts at the beginning of the year come to terms with the reality that they will remain higher for longer,” read the report.
Bankruptcies in the consumer discretionary sector — which includes footwear and apparel — came in at eight for the month. Since the start of the year, there have been 28 total consumer discretionary bankruptcy filings, making it the sector with the most bankruptcies year-to-date. Notably, apparel retailer Express filed for bankruptcy on April 22 and has started the process to close 106 stores. The company was one of three with more than $1 billion in liabilities that filed for bankruptcy in April. In March, crafts retailer Joann Inc. filed for bankruptcy citing consumer caution and higher operating costs. The company operates more than 800 stores across the country.
When it comes to footwear-specific companies, the U.S. based entities of slip-resistant footwear company Shoes for Crews (or Never Slip Holdings, Inc.) filed voluntary petitions for bankruptcy in April in an effort to undergo a sale of its business. The company said it plans to enter a stalking horse asset purchase agreement to sell the business in a deal that would enable the company to keep operating under a new owner and would allow for the investment into global markets.
In 2023, U.S. corporate bankruptcy filings hit 637. Along with consumer discretionary, healthcare and industrials accounted for the most bankruptcy filings in 2023.
