More Companies at Risk of Going Under

U.S.News & World Report
More Companies At Risk of Failing
Tuesday March 10, 12:46 pm ET
By Rick Newman

Everybody hopes the economy bottoms out and starts to improve tomorrow. Or sooner. But there are few signs of an imminent recovery. One obvious indicator is the health of big companies - you know, the ones that have been announcing all those four- and five-digits layoffs recently. And the outlook for them seems to be getting worse, not better.

Moody's, the ratings agency, recently published a list of "bottom rung" companies most likely to default on their debt...

Companies exposed to consumer spending have it toughest. The industries most represented on the list are media, automotive, retail and manufacturing. Companies in the most acute danger are those with reduced cash flow and a high debt load. A lot of big, well-known companies are in danger. On the list: Advanced Micro Devices; AirTran; AMR (parent of American Airlines); Chrysler; Duane Reade; Eastman-Kodak; Ford; General Motors; JetBlue; Krispy Kreme; Palm; R.H. Donnelly; Reader's Digest Association; Rite-Aid; UAL (parent of United Airlines); Unisys; and US Airways...

America's malls are going to end up looking a lot different. The retail sector is obviously getting hammered, with chains like Circuit City and Linens 'n Things already out of business. Many other retail chains are in trouble. Also on the bottom-rung list: Barney's; BCBG Maz Azria; Blockbuster; Brookstone; Claire's Stores; Eddie Bauer; Finlay Fine Jewelry; Harry & David; Loehmann's; Michael's Stores; Oriental Trading Co.; and Sbarro. Again, this doesn't mean the company is doomed. But many of these firms will restructure, close outlets, shrink, and find ways to transform themselves. So if you ever go back to the mall, and your favorite shop has disappeared, you'll know why...

See 15 firms that might not survive 2009.
See 6 possible upsides to a GM bankruptcy.
Source: More Companies At Risk of Failing