What I Learned This Week

The U.S. equity market’s soft underbelly: a growing list of increasingly vulnerable zombie companies.

Talking to Financier Worldwide Magazine this month, Andrew Schoulder, a partner at Bryan Cave, summed up the ongoing retail apocalypse: “The Band-Aid has been on for so long and part of what we are seeing now is the adhesive coming off.” As of June, more than 300 U.S. retailers had filed for bankruptcy in 2017, up 31% year-over-year. And while they range from small-to-medium-and-large businesses, the catalysts for their failure are common. Amazon-led disruption has driven foot-traffic declines, weakening the operating performance of traditional retailers. Meanwhile, debt accumulation—Schoulder’s “Band-Aid”—obscured the severity of this dynamic for years. Now, we’ve reached a tipping point: i…

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