Bankruptcy and business closures happen slowly, then all at once, but the warning signs are always there.According to PWC, Chapter 11 filings in 2022 and 2021 were suppressed by unusual levels of government subsidies for consumers and businesses, an ultra-low interest rate environment, and an abundance of capital, which enabled companies to borrow their way out of trouble or extend the inevitable. As these dynamics have largely dissipated, bankruptcy filings and closures have steadily increased.BeautyMatter tracked 25 bankruptcies and closures in 2024, down slightly from the 28 tracked in 2023. Persistent tightness in the financial markets, a challenging retail environment, increased competition, pressure on margins, and the increasing amount of capital required to manage and grow a beauty brand were the sector-specific dynamics at play last year. There were also a significant number of distressed asset transactions dressed up as meaningful M&A transactions tracked in the BeautyMatter 2024 M&A + Deal Flow Report.According to statistics released by the Administrative Office of the U.S. Courts, total bankruptcy filings rose 14.2%, with increases in both business and non-business bankruptcies, in the 12-month period ending December 31, 2024. Business bankruptcy filings rose 33.5% in the 12 months ending Sept. 30, 2024. This continues an ongoing rebound in filings after more than a decade of sharply dropping totals, but they remain far lower than historical highs.This is not limited to Western markets.