Friday, July 31, 2015

ANOTHER RETAIL CHAIN ABOUT TO BITE THE DUST......A SAD FACT!

ANOTHER RETAIL CHAIN ABOUT TO BITE THE DUST

Just two years after Toy'R'Us attempted (and failed) to IPO, Bloomberg reports that insurance companies are cutting back on their coverage of the firm's suppliers. Without this 'insurance', which protects suppliers in case a retailer fails to pay them for merchandise - as in the event of a bankruptcy - the risks of shipping to the retail chain soar. Toys'R'Us bonds have collapsed to lows as investors recognize that credit insurers sometimes cancel existing policies if a company's performance declines precipitously enough to place its ability to keep operating in doubt. The same thing occurred in the months before bankruptcy filings at RadioShack, Borders, and Circuit City.



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