Charlotte Russe, Lands’ End and FullBeauty Brands are among the firms listed as having a “negative” outlook that could contribute to the growth in the ranks of distressed retailers over the next 12 to 18 months, according to Moody’s Investor Service.

The ratings firm attributes the growth in distressed firms to the secular shift in the industry, and expects more defaults in the months ahead. The company said the credit erosion in the sector is “crystalizing at a rapid pace as more issuers filed for bankruptcy.” It also expects that as the department store and specialty retail sectors continue to deteriorate, the distressed retail ranks will keep growing. But while distressed issuers are back at Great Recession levels, Moody’s found that the majority of its rated company universe “remains sound.”

The ratings firm said its rated retail and apparel issues in February saw 19 retailers with ratings of “Caa” or lower. That number has since grown 15 percent and now numbers 22.

Moody’s said issuers with a “B2” or “B3” rating face a possible $1.1 billion in maturities in 2018. There are 42 companies having either of the two ratings, and of the 42, there are seven that face $1.1 billion of potential maturities next year. These firms don’t yet have the stressed liquidity or weak quantitative credit profiles that are common characteristics of those firms with a lower credit rating.

In the Moody’s report titled “B2/B3 Issuers Gain Spotlight as Distressed Retail and Apparel Ranks Grow,” all seven “B3” rated issues are private, except for Toys ‘R’ Us at $48 million.

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