Forecast on Sectors to Watch as Bankruptcy Risk Stays Elevated in 2026
Distress is still broad-based heading into 2026, but it is not hitting every corner of the economy equally. The recent Chapter 11 filing of Saks Global (parent to Saks Fifth Avenue and Neiman Marcus) is one more reminder that consumer-facing businesses remain exposed when discretionary spending softens and costs stay sticky. What we’re seeing instead of a true “everything recession” is a more targeted pressure cycle, where rate sensitivity, leverage, and reliance on consumer demand determine which sectors break first.
Retail and Casual Dining Remain the Tip of the Spear
Recent filings in the retail space, including Saks Fifth Avenue, highlight how quickly consumer-facing businesses can come under pressure when liquidity tightens and demand becomes less predictable. Whether Saks’ issues reflect a broader trend is still unclear, but discretionary spending remains uneven, and households—especially in lower-income brackets—are showing signs of fatigue. Retailers built on thin margins, seasonal cash cycles, and high lease exposure remain vulnerable. Casual dining faces the same dynamics, squeezed further by rising labor costs and inconsistent foot traffic.
Real Estate Feels the Weight of Rates
Commercial real estate continues to be the stress magnet of the post-pandemic era. Office vacancies are persistently high, valuations are drifting lower, and debt maturities are accelerating. Industrial and multifamily property owners aren’t immune either as refinancing resets hit balance sheets hard. 30% of chapter 11 cases filed last year involved real estate.
Energy Caught Between Volatility and Transition
Oil and gas companies are generally healthier than in prior downturns, but volatility cuts both ways. Capital-intensive producers, especially those with leverage-heavy balance sheets, are exposed. Renewables face their own strain project delays, higher equipment and financing costs, and uncertain tax-credit timing.
Healthcare and Higher Education Under Structural Pressure
Hospitals and senior care operators continue to struggle with staffing shortages, union disputes and reimbursement challenges. Higher education institutions particularly small private colleges are battling enrollment declines and escalating operating costs. We are interested in working with private colleges if you are involved with one.
Non-Bank Finance Faces Scrutiny
Private credit, mortgage servicers, and specialty lenders thrived during the low-rate era, but as defaults rise and liquidity tightens, some models may prove brittle. Credit stress here could ripple outward.
The Bottom Line
2026 is unlikely to bring a broad-based bankruptcy wave but distress is real and persistent where leverage, rate sensitivity, and consumer reliance intersect. For investors, lenders, and restructuring professionals, the opportunities and risks seem to be more focused.
Strategic Liquidity Fund, LLC is a leading buyer of distressed assets in bankruptcy estates, receiverships, and distressed companies. Please contact us if are looking to monetize assets in your estate.