The distress index led by retail ranks top in Europe as weak spending, tightening of credit and economic volatility caused the greatest crisis since 2009.

The most recent European Distress Index of Weil, Gotshal & Manges shows that retail has climbed to the top of the ranks of the most distressed industries in Europe and is now ahead of industrials and real estate. As the index indicates, soft discretionary retail and consumer goods manufacturers are experiencing tremendous pressure due to soft discretionary retail and consumer goods manufacturers experiencing extreme pressures, including pressure on margins and tight credit conditions. This is the worst stage of retail distress since the global financial meltdown in the year 2009.

This is shown by the sudden decay with the retail sector going up two positions in the distress levels since April. The report also mentioned sustained tariff uncertainties as a supply chain disruptor, especially to retailers that have a presence in exporting to the U.S.

The general European corporate situation is becoming too volatile and corporate distress is at its highest since September last year. The most troubled national market has remained Germany, the report indicated.

The decline in retail has been used as a major indicator of the economic problems existing in Europe. Seven of the ten industries studied have recorded a deteriorating situation. According to the report, the signs of corporate distress include a drop in liquidity, shrinking profitability, increasing insolvency risks and decreased valuation.

The situation is still dire as geopolitical tensions and economic uncertainties exist, so the prognosis of the retail industry and the European economy as a whole is rather adverse.