Bankruptcies can also signal broader industry trends, such as the rise of e-commerce and the decline of traditional stores (consider the dominance of Amazon, Shein, and Temu). However, they can also present opportunities for a fresh start (consider Red Lobster's current efforts).

In 2023, bankruptcy filings jumped 16.8%, reaching nearly 453,000 cases, up from 388,000 the year before, according to statistics published by the U.S. Courts administrative office (these include both business and nonbusiness bankruptcies).

Most retail and food industry giants that file for bankruptcy opt for Chapter 11 of the U.S. Bankruptcy Code. Chapter 11 allows companies to reorganize their debts, continue operations, and negotiate deals with creditors, all while avoiding a complete shutdown. It also gives them time to make serious strategic changes, such as downsizing, closing underperforming stores, or renegotiating leases (something Red Lobster is also doing).

Chapter 11 also helps companies preserve the brand's identity, allowing companies to reposition themselves and mitigate the perception of an outright failure. The process has the potential to even satisfy shareholders.

We've compiled a list of the top 10 U.S. bankruptcies in the retail sector so far this year, including the industry they fall into, and when and why they filed for bankruptcy.

It's important to remember that each company's bankruptcy process is unique, and can be influenced by factors such as size, shifting consumer demand, and overall notoriety.