Such brands as Payless ShoeSource, Rue21 and True Religion were in the black last year when they filed for bankruptcy. The moves enabled them to not only restructure debt that was becoming unmanageable, but also to close stores and negotiate for lease concessions at other locations.

“Right now there’s an impression that companies need to be insolvent in order to file for bankruptcy, and that’s not fundamentally correct,” Angelich said. “In fact, being profitable and filing for bankruptcy is not uncommon — there is a viewpoint that it’s a good idea to file before you’re in immediate distress.”

That being said, the unwieldy debt burdens that private equity firms have foisted onto their retail portfolio companies, together with overall concerns about e-commerce’s ultimate impact on brick-and-mortar general merchandise and apparel brands, generate a more unpredictable bankruptcy process, observers say.

Even so, some retailers are finding it more challenging to reemerge from bankruptcy, and there has been a growing trend toward liquidations or outright sale of companies, says Deborah Rieger-Paganis, a managing director with AlixPartners, a New York City–based global consulting firm. In a study that tracked retail bankruptcies representing upwards of $50 million in liabilities from the beginning of 2006 to mid-October 2017, AlixPartners found that only 16 percent resulted in reorganization. Forty-six percent ended in liquidation and 38 percent in bankruptcy sales. By comparison, only 10 percent of nonretail companies that declared Chapter 11 ended up liquidating.

Some blame, at least in part, bankruptcy reform limiting the amount of time a bankrupt retailer can renegotiate a lease — a reform that received strong backing from landlords. More than that, however, retailers are frequently finding it difficult to drum up creditor support for reorganization plans, especially when inventory can so often be sold relatively quickly and at attractive prices. Two days after Bon-Ton Stores filed for bankruptcy this year and announced that it would close 40 of its 260 stores, a group of creditors holding $223 million in second lien notes demanded that the company abandon a plan to find a suitor and instead liquidate immediately. These creditors argued that the money-losing department store, which bears some $1.7 billion in debt versus $1.6 billion in assets, had failed twice before to find a buyer before entering Chapter 11. Creditors also blamed e-commerce headwinds for Bon-Ton’s falling sales and expressed doubt as to whether the York, Pa.–based retailer could adapt to the environment.

The argument for liquidation is likely to become more prevalent, says Thomas Mullaney, a JLL managing director who co-leads the firm’s restructuring services. “We sit here today in the best macroeconomy in the last 30 years, yet all of these companies are struggling,” Mullaney said. “There are the usual reasons: e-commerce, and so many of these companies put out so much of the same product that eyes glaze over. But they also have huge amounts of debt that is rolling over in 2018, 2019 and 2020. What happens if interest rates go up 50 to 100 basis points or the economy begins to tank?”

Despite such liquidations, however, the brand often lives on. Private equity firm Sycamore Partners acquired the intellectual property and e-commerce business of The Limited for nearly $26 million last year and moved the business to an online platform after the retailer declared bankruptcy and closed its 250 stores. Among other post-bankruptcy brands now operating exclusively online are Wet Seal and H.H. Gregg. Last year Rieger-Paganis served as interim CEO for BCBG Max Azria Global Holdings when Marquee Brands bought the retailer in a bankruptcy sale. Among other strategies, Marquee Brands has licensed another group to operate BCBG’s smaller store footprint and is building up BCBG’s e-commerce platform. “Private equity firms in particular are looking to sell their retail companies, and if you have a brand that has some value, there are nontraditional buyers that have moved it to an online business,” Rieger-Paganis said. “We’re beginning to see some interesting things happening.”

Meanwhile, retailers with plans to exit bankruptcy must first successfully renegotiate leases with landlords, a process that frequently begins before a company declares Chapter 11, in an effort to avoid court. Experts say that many shopping center owners today are more inclined to make deals and maintain occupancy because fewer prospects are waiting in the wings. But risk accompanies that option, Rieger-Paganis cautions. “Landlords need to protect themselves,” she said, “and [to] consider whether a company is still relevant and has a good business model that’s going to allow it to thrive once it emerges from bankruptcy.”