Fitch Ratings today published its third edition of the 'High Yield Retail Checkout', which provides a comprehensive analysis of the leveraged finance retail sector.

The report profiles 22 of the largest high-yield retail and apparel companies. Each company report includes Fitch's assessment of the business and financial profile, and provides detailed capital structure, a debt organizational chart, and covenant analyses.

Fitch expects total retail sales growth in the 4% range in 2014, which assumes 2%-3% growth in comparable store sales (comps) and modest square footage growth. However, a variety of challenges including growing online competition, reduced store traffic and persistent pressure on low income consumers will continue to constrain the performance of many leveraged retailers in 2014.

Traditional retailers that are losing market share to the digital realm and to discounters are at the most risk. These retailers, which include RadioShack, Sears and Toys 'R' Us, have experienced significant EBITDA erosion and have business models that bring into question their ability to turn EBITDA around.

The average adjusted leverage of the high yield retailers is 6.0x, up from 5.4x a year ago. Higher leverage is attributable to actions such as leveraged dividends, and significant EBITDA contraction due to execution missteps and/or share losses.

The following companies are profiled in the report:

Bon-Ton Stores, Inc. (The)
Best Buy Co., Inc.
Burlington Stores, Inc.
Claire's Stores, Inc.
GNC Holdings Inc.
Gymboree Corporation (The)
Hanesbrands Inc.
J.C. Penney Company, Inc.
J.Crew Group Inc.
Jones Group, Inc. (The)
Levi Strauss & Co.
L Brands, Inc.
Michaels Stores, Inc.
NBTY, Inc.
Neiman Marcus Group LTD Inc.
PVH Corp.
RadioShack Corporation
Rite Aid Corporation
Sally Beauty Holdings, Inc.
Sears Holdings Corporation
SUPERVALU Inc.
Toys 'R' Us, Inc.

The full report 'High Yield Retail Checkout' is available at www.fitchratings.com. Fitch's 2014 outlook report for the U.S. retail sectors is also available.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research: High-Yield Retail Checkout (Comprehensive Analysis of Major High-Yield Retailers)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732995

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Fitch Ratings
Monica Aggarwal, +1-212-908-0282
Senior Director
Fitch Ratings, Inc.
1 State Street Plaza
New York, NY 10004
or
Media Relations:
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