The impact of retailers’ bankruptcy filing on consumer perceptions and behaviors

Purpose This study aims to examine the impact of retailers’ bankruptcy filings on consumers’ perception of risk, perceived quality, consumer trust and purchase intentions, as well as the moderating effect of brand reputation and brand price level on the impact of retailers’ bankruptcy filings. Design/methodology/approach This experiment used a 2 × 2 × 2 fractional factorial design. Of the 180 questionnaires collected through the Qualtrics survey platform, 165 responses were considered valid and used in the study. Findings The results of this study showed that bankruptcy filing can decrease consumers’ intent to purchase from the company. The results also revealed a significant positive relationship between brand reputation, trust and purchase intention. Originality/value To the best of the authors’ knowledge, this study is the first empirical investigation of the negative implications of corporate bankruptcy on consumer behavior in the retail sector. Therefore, this study can contribute to a better understanding of how bankruptcy filings by apparel retailers may affect consumer perception and purchase behavior.