From a risk-of-bankruptcy standpoint, the retail business is the new oil and gas

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American Apparel is among a clutch of retail chains to have already given up the ghost and filed for bankruptcy protection.

Move over, oil and gas.

Retail is set to replace the troubled energy sector as the most distressed sector this year, according to ratings agencies, lawyers and analysts, beaten down by the strain of competition from juggernaut Amazon.com Inc. AMZN, +0.75% and a range of other issues.

The sector’s future is looking increasingly gloomy, with the cost of digital investments, trimming excessive store locations and lagging revenue amid declining traffic setting the stage for a spate of bankruptcies and restructurings in 2017 and 2018, experts say.

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