NEW YORK, NY - SEPTEMBER 12: A Forever 21 store stands in Herald Square in Manhattan on September 12, 2019 in New York City. The Wall Street Journal reported that the retail chain is planning to file for bankruptcy as soon as Sunday. The company is refuting these reports and said they plan to continue operating a vast majority of their U.S. stores. (Photo by Drew Angerer/Getty Images)
Drew Angerer/Getty Images
NEW YORK, NY - SEPTEMBER 12: A Forever 21 store stands in Herald Square in Manhattan on September 12, 2019 in New York City. The Wall Street Journal reported that the retail chain is planning to file for bankruptcy as soon as Sunday. The company is refuting these reports and said they plan to continue operating a vast majority of their U.S. stores. (Photo by Drew Angerer/Getty Images)
Now playing
01:42
Forever 21 files for bankruptcy
Getty Images
Now playing
02:18
This airplane-shaped bag is selling for more than some actual planes
Now playing
00:54
See Nike's new 'hands-free' shoe
One of many large boxes of returned products that fill the warehouse. The returned products in this box will eventually be sorted and categorized.
John General/CNN
One of many large boxes of returned products that fill the warehouse. The returned products in this box will eventually be sorted and categorized.
Now playing
05:08
Here's where your 'free' online returns actually end up
Shutterstock
Now playing
04:42
Ever receive a package you didn't order? It could be a scam
Orangetheory Fitness
Now playing
02:13
This gym is actually opening studios during the pandemic
Now playing
02:24
How holiday spirit is surging despite the Covid-19 pandemic
NEW YORK, NEW YORK - NOVEMBER 19: A view of the window display as Macy's Herald Square unveils Give, Love, Believe 2020 Holiday Windows on November 19, 2020 in New York City. (Photo by Eugene Gologursky/Getty Images for Macy's)
Eugene Gologursky/Getty Images North America/Getty Images for Macy's
NEW YORK, NEW YORK - NOVEMBER 19: A view of the window display as Macy's Herald Square unveils Give, Love, Believe 2020 Holiday Windows on November 19, 2020 in New York City. (Photo by Eugene Gologursky/Getty Images for Macy's)
Now playing
00:56
Macy's unveils holiday window display with gratitude theme
CNN/Target/Design by John General
Now playing
02:36
It's official: Black Friday is irrelevant
Now playing
02:23
Party City CEO: Consumers still want to celebrate together
NEW YORK, UNITED STATES - 2020/07/08: People wearing face masks shopping inside a retail store in Manhattan as the city enters phase 3 of reopening amid the coronavirus pandemic
As New York City enters phase 3 of reopening retail stores for indoor shopping, restaurants have been postponed for indoor dinning. The U.S. Department of Health recorded a total of 3,219,999 infections, 135,822 death and 1,426,428 recovered since the beginning of the outbreak. (Photo by Braulio Jatar/SOPA Images/LightRocket via Getty Images)
Braulio Jatar/SOPA Images/LightRocket/Getty Images
NEW YORK, UNITED STATES - 2020/07/08: People wearing face masks shopping inside a retail store in Manhattan as the city enters phase 3 of reopening amid the coronavirus pandemic As New York City enters phase 3 of reopening retail stores for indoor shopping, restaurants have been postponed for indoor dinning. The U.S. Department of Health recorded a total of 3,219,999 infections, 135,822 death and 1,426,428 recovered since the beginning of the outbreak. (Photo by Braulio Jatar/SOPA Images/LightRocket via Getty Images)
Now playing
01:38
US retail sales improved in September
thehouseofdrew.com
Now playing
02:01
Justin Bieber's footwear collaboration overwhelms site
Walmart
Now playing
01:01
See what's new inside Walmart stores
3119 E Third Street Dollar General in Dayton, OH on March 12, 2020.
Maddie McGarvey for CNN
3119 E Third Street Dollar General in Dayton, OH on March 12, 2020.
Now playing
06:07
Dollar General's business is booming. It's also vulnerable to crime, police say
Now playing
03:01
How private equity is gutting retail
Now playing
01:55
All retail bankruptcies are not the same. Here's what you need to know
(CNN Business) —  

The retail apocalypse over the past several years has devastated America’s department stores, chains and mom-and-pops. Stores are closing at record levels. The number of people working in retail is on the decline.

And all of that has happened at a time when the economy was strong.

But if the United States slips into a recession, as many economists fear it will sometime next year, the problems plaguing retail could get far worse. Store closings could accelerate and layoffs in the sector — a major provider of American jobs — could spread.

“Brick-and-mortar retailers are already in recession,” said Mark Zandi, chief economist for Moody’s Analytics. “They’ve been laying off workers coming up on three years. And this is a time when consumers are out spending aggressively. If the broader economy is in recession, there is going to be blood in the streets.”

Forever 21 on Sunday was the latest major retailer to file for bankruptcy. It announced plans to close as many as 178 stores in the United States, about a third of those it operates. Earlier this month, Fred’s, a 72-year-old discount chain, said it would close its remaining 300 stores.

US retailers this year have already announced more than 8,200 store closings — well above the previous record of 6,700 in 2017, according to Coresights Research. By year’s end, the annual tally could reach 12,000, Coresights estimates. Payless and Gymboree both filed for bankruptcy for a second time this year, closing nearly 3,000 stores between them.

Consumers shifting their purchases from traditional stores to online are big part of the problem. In fact, consumer spending remains strong and unemployment is at about a half-century low below 4%.

But fears of a downturn loom. Other major economies are already in or near recessions. A trade war between the United States and China could cause the price of consumer goods to rise. A survey by Duke University found that two-thirds of chief financial officers expect a recession by the end of 2020.

Meanwhile, many retailers have borrowed heavily.

“If the economy were to struggle, it would accelerate the collapse of a lot more of the debt-financed retailers. And you would see an acceleration in store closures,” said Greg Portell, lead partner in the global consumer and retail practice of consultant AT Kearney.

So far, many of the retailers that have failed did a poor job meeting consumers’ needs, Portell said. A recession would put a squeeze on even better managed, up and coming, retailers. “Their future depends on them being able to find financing,” he said.

Consumers are likely to pull back on spending if unemployment starts to rise, Moody’s Zandi said, and credit is likely to get tighter, both for retailers and for consumers.

“A lot of retailers are hanging on because the broader economic environment is strong, interest rates are low, credit is available,” Zandi said. “No sector is more dependent on credit. If a recession comes, credit will get cut off both to the consumers and the retailers. That is going to mean a rash of bankruptcies and a lot of lost jobs.”