Former Home Depot CEO issues grim warning over US bankruptcies: ‘It’s different than anything I’ve seen’
Former Home Depot CEO Bob Nardelli issued a grim warning over the U.S.’s “very complex” economy, cautioning consumers that middle market companies are under “tremendous pressure.”
“I think we’re going to see a lot of bankruptcies. Like Bed, Bath and Beyond. We got Walmart not only laying people off, but closing stores. We got Accenture laying people off. We got Amazon closing distribution centers. So I think there’s a tremendous-mixed message,” Nardelli said during an appearance on “Cavuto: Coast to Coast.”
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The former CEO continued, saying that the “complexity” of the U.S. economy is “different than anything I have seen in my 52 years.”
According to UBS analysts, more than 50,000 retail locations could permanently shut their doors over the next five years. Those closures would cut the current U.S. store count of about 940,000 by around 5% by the end of 2027.
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The number of shuttered stores is “already up significantly” in 2023 compared to last year, due to heavy hitters like Bed Bath & Beyond, Foot Locker and bankrupt Tuesday Morning trimming their footprints.
“We’re in a very complex environment. And, of course, this debt issue only adds to that,”
Over the past year, Bed Bath & Beyond has initiated a turnaround plan that involved shuttering hundreds of stores. Last month, Foot Locker announced it plans to shutter more than 400 low-performing stores in shopping malls by 2026 as it shifts its focus to new concept stores.
According to Nardelli, Congress’ inability to come together and raise the debt ceiling limit has placed an unprecedented burden on businesses, sharing with host Neil Cavuto that he is “definitely worried.”
“I’m seeing inventory builds in a lot of the businesses, both public and private. Neil, you remember when we spoke in ‘07, ’08 and ’09, there was a singular focus on the banks, right? Their meltdown took everything down,” Nardelli continued, Friday.
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“Today, the banks are doing great. But now we have this mixed messaging. Retail is not doing so well. Banks are doing well. Transportation is up 13.9% over the last 12 months. I think we’re in a very complex environment. And, of course, this debt issue only adds to that. It adds to the certainty of uncertainty, what’s going to happen,” he concluded.
FOX Business’ Daniella Genovese contributed to this report.