Grok says:
Candidates for Vulnerability
Big Lots
Why at Risk: This discount retailer filed for Chapter 11 bankruptcy in September 2024 after warning of “substantial doubt” about its survival. A deal to sell itself to a private equity firm fell through in late 2024, and it’s now closing all 963 remaining stores. While it’s already in bankruptcy, its failure to emerge successfully could make it the next high-profile casualty if liquidation becomes final.Likelihood: High for full collapse if no last-minute rescue emerges. It’s a big name with a broad footprint, fitting the “big American company” bill.
Spirit Airlines
Why at Risk: Spirit filed for Chapter 11 in November 2024, citing mounting losses, heavy debt, and fierce competition from larger carriers. It’s negotiating with creditors to emerge in 2025 with reduced debt, but its ultra-low-cost model has struggled post-pandemic, and a failed merger with JetBlue left it exposed. Posts on X and reports like those from CNN note its precarious position.Likelihood: Moderate. Bankruptcy doesn’t always mean liquidation—Spirit could restructure successfully—but a prolonged downturn in travel demand or creditor pushback could sink it.
Party City
Why at Risk: Filing for Chapter 11 in December 2024 (its second in under two years), Party City is closing all 700+ stores in early 2025. Inflation hit its product costs hard, consumer spending dropped, and it’s saddled with $800 million in debt. This mirrors retail trends seen in 2024 bankruptcies like Red Lobster and Joann.Likelihood: Very high for a total wipeout. It’s already on the path to liquidation, making it a strong contender for the “next big” bankruptcy if you count final closure as the defining moment.
Bed Bath & Beyond (Post-Revival)
Why at Risk: After its 2023 bankruptcy and asset sale to Overstock (rebranded as Beyond, Inc.), the revived Bed Bath & Beyond has struggled to regain footing. X posts from 2025 (e.g., sentiment around March 17) echo earlier 2022 warnings from credit agencies like S&P about its debt load and private equity burdens. A slowing economy could push this restructured entity back into distress.Likelihood: Moderate to high. It’s not as immediate as Party City, but its brand revival hasn’t proven sustainable yet.
Rite Aid (Post-Bankruptcy Struggles)
Why at Risk: Rite Aid emerged from Chapter 11 in mid-2024 after shedding $2 billion in debt, but it closed hundreds of stores and faces ongoing competition from giants like CVS and Walgreens. Pharmacy chains are under pressure from low margins and shifting consumer habits. If its recovery falters, it could slide back into insolvency.Likelihood: Moderate. It’s a big name, but its recent restructuring buys it some time—unless market conditions worsen sharply.
Broader Trends and Wildcards
Retail Sector: 2024 saw over 7,100 store closures (per CoreSight), a 69% jump from 2023, driven by inflation and reduced discretionary spending. Big Lots and Party City fit this pattern, suggesting other retailers like Macy’s or Kohl’s could follow if sales keep sliding—though their scale and adaptability lower the immediate risk.Airlines and Travel: Spirit’s woes highlight vulnerabilities in budget travel, but larger carriers like American Airlines (with $30+ billion in debt) could become targets if fuel costs spike or demand craters.
Economic Context: Rising interest rates, a potential recession, or Trump administration policies (e.g., tariffs, deregulation) could tip over-leveraged firms. Posts on X speculate about firms like Bed Bath & Beyond due to these macro pressures.
Most Likely “Next Big” Pick
If we define “big” by name recognition and impact, Party City stands out as the closest to a full collapse among major players. Its imminent store closures and second bankruptcy in two years signal a death knell—potentially finalizing in Q2 2025 if liquidation proceeds. Big Lots is in a similar boat but slightly behind in the process. Spirit Airlines, while big, has a restructuring path that might delay its demise.
