19.02.2026 10:30
Gabe's, a discount clothing chain with 160 branches in the U.S., is facing bankruptcy risk due to downgrades by international credit rating agencies; the company, which is considered to have a fragile financial structure, is expected to file for bankruptcy protection within the next year.
One of the leading discount clothing retailers in the U.S., Gabe's, has come close to bankruptcy as signs of financial distress have intensified. Recent assessments by credit rating agencies indicate that the company, which has 160 stores, may file for bankruptcy protection within the next 12 months.
International credit evaluators Fitch, Moody's, and S&P Global have downgraded Gabe's credit ratings, placing the company in risky categories. Fitch issued a "Tier 1 Market Concern" class warning for the firm, while Moody's assigned a "Caa3" rating and S&P Global gave a "CCC" rating; industry analysts state that these ratings indicate a significant increase in default risk.
MEASURES TAKEN DID NOT SAVE FROM CRISIS
Gabe's underwent an out-of-court restructuring process last summer for debt reduction and refinancing; approximately $115 million in debt was alleviated, and $55 million in new financing was secured. However, experts express that these steps have not fully addressed the financial fragility.
The company operates in the same market as strong competitors like Marshalls, TJ Maxx, and Ross Dress for Less. Experts emphasize that intense competition and shrinking profit margins are increasing the pressure on Gabe's and that similar retail chains are also facing challenges.