From Party City to Bed Bath & Beyond: Bankruptcies just hit their highest level since the Great Recession
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- Corporate bankruptcies just hit their highest levels since 2010, according to new data.
- This year's bankruptcies include Party City, Serta Simmons, and the parent of Silicon Valley Bank.
- Certain professions, including lawyers and bankers, stand to benefit from a restructuring boon.
Rising interest rates, supply chain woes, and the online shopping boom are proving a lethal combination for many businesses.
There were 54 corporate bankruptcies in the US in May, bringing this year's total to 286, according to new data from S&P Global Market Intelligence. That's the highest number of US corporate bankruptcies recorded for the first five months of the year since 2010, the data provider said.
Consumer discretionary companies, which focus on selling non-essential goods, lead the spate of bankruptcies with 37 filings so far in 2023, according to S&P's Market Intelligence data.
This year's bankruptcies include party goods retailer Party City and mattress seller Serta Simmons, both of which filed for restructuring protection in January. Bed Bath & Beyond also filed for Chapter 11 bankruptcy protection in April, a process that has led to hundreds of store closures.
The parent company of collapsed Silicon Valley Bank also filed for bankruptcy after questions about its financial stability in an environment of rising rates led to a fatal run on deposits.
The Federal Reserve has raised interest rates 10 times since March to cool the economy and slow rapidly rising costs for goods and services. It's unclear where the economy is headed next, and some experts predict a recession, which will only put pressure on more companies, especially those that need to pay off debts.
Of course, the retail apocalypse started well before the economic slowdown, and there are signs that consumers are still spending heavily, even if their shopping habits have changed.
Certain professionals, meanwhile, stand to make a lot of money from the rise in bankruptcies, including lawyers and bankers. See the top bankruptcy lawyers and investment bankers poised for a boon in business as the economy falters.