It’s going to be a make-or-break holiday season for these retailers

More than $766 billion in sales is up for grabs this holiday season, amounting to as much as a 5.2% jump from 2019 levels, according to the National Retail Federation.

But even if this upbeat forecast — which comes in a rocky year for retail — is spot on, not all companies are going to benefit from the growth.

The Covid-19 pandemic has pushed a record number of consumers to shop online, and big-box retailers such as Walmart and Target have seen the biggest benefits from the shift in spending. These businesses were also helped by being deemed essential, so their stores weren’t forced to shut last spring.

Others weren’t as lucky. There have been more than three dozen retail bankruptcies this year, according to S&P Global — an 11-year high. And more than 8,400 store closures have been announced by retailers, according to Coresight Research.

“The worst is yet to come. The dust has not settled on this,” Scott Stuart, CEO of the Turnaround Management Association, recently told CNBC in an interview. “You think Christmas is going to save retailers? Maybe it won’t.”

Retailers found in shopping malls have suffered some of the greatest hardships. Weeks of store closures resulted in millions of dollars in lost sales. Some skipped rent payments or requested deferrals, and that walloped mall owners. Seven publicly traded retail landlords, including Simon Property Group, were called out in a report last week by S&P Global as facing exceptional risks heading into the winter.

And with Christmas right around the corner, when procrastinating shoppers typically make a last-minute dash to the mall, more shutdowns loom with Covid cases on the rise. If that happens in a significant way, the setback could rob struggling retailers of their shot at redemption.

“In the natural cycle of retail, Christmas is normally defining,” Stuart said. “The first quarter is time for large fallouts. It will be very definitional for retailers this year.”

Here are five retailers that are working feverishly to turn their businesses around and could use a strong holiday season. The market caps and stock performances of the companies are listed as of Monday’s market close.

Market cap: $7.6 billion
Year-to-date stock performance: Up 15%

This holiday season marks a pivotal moment for Gap Inc. to redefine each of its brands.

The debut of its 2020 holiday campaign — which included the first holiday ad for Banana Republic aired across national television since 2005 — shows how hard the retailer is trying to differentiate each of its labels to consumers through clearer storytelling. With Old Navy, which caters to budget-conscious families, and Athleta, which caters to women looking for active and lounge wear, the company has found greater success during the global health crisis, as shoppers seek out reasonable prices and comfort.

Still, the retailer’s latest quarterly results for the period ended Oct. 31 fell short of expectations, hurt by poor sales at Gap’s weaker namesake banner and at Banana Republic, a women’s workwear destination that is being frequented less because of the pandemic. Gap has been closing underperforming stores this year under both of these brands, and more of that trimming will take place in 2021. But CEO Sonia Syngal emphasized late last month to analysts that Gap remained optimistic about its performance during the winter months, calling for fourth-quarter sales to be about equal to or slightly higher than a year ago.

To shine through this holiday season, Gap will need to reach new customers with its marketing efforts, prove that its plans to sell more loungewear and fewer pantsuits under Banana Republic are bearing fruit and continue to pare the parts of its business that are holding it back from growth. That will put it in a much healthier spot to start the new year, when it is also expected to debut the new Yeezy Gap label, through a partnership with rapper Kanye West.

Market cap: $10.6 billion
Year-to-date stock performance: Up 110%

L Brands is hoping to chart a new course for its Victoria’s Secret lingerie brand, using this holiday season as a catalyst to kick-start its efforts.

Earlier this year, L Brands and Sycamore called off their deal, in which the private-equity firm was positioned to take a 55% stake in Victoria’s Secret for about $525 million, citing L Brands’ failure to maintain normal business operations during the pandemic. L Brands, which also owns Bath and Body Works, is still planning to run Victoria’s Secret as a separate, standalone company. It’s unclear, though, when that split will take place and who the new owner of Victoria’s Secret could be.

In the meantime, L Brands needs to prove that the Victoria’s Secret brand can still be relevant with female consumers. It’s been tied too closely to sexiness and not closely enough to comfort, which is what many women are looking for today. In late November, the company named a new head of its Victoria’s Secret lingerie business, as well as a new chief design officer, as part of its bid to revive the brand and revamp outdated merchandise.

The struggles at Victoria’s Secret are a stark contrast to the successes that Bath & Body Works has experienced during the pandemic, with its hand sanitizers flying off the shelves. In its latest quarter ended Oct. 31, L Brands reported better-than-expected results, helped by record sales at the Bath & Body Works banner. If Victoria’s Secret can push further into comfort categories this holiday season, and Bath & Body Works’ sales of lotions, sanitizers and candles remain strong, L Brands could be in a sweeter spot in 2021.

Market cap: $3.2 billion
Year-to-date stock performance: Down 39%

Macy’s needs some magic this holiday season — and not just a miracle on 34th Street, where its flagship store in New York City is located.

Its same-store sales – a key industry metric tracking sales online and at stores open for at least a year — declined more than 20% during its latest reported quarter ended Oct. 31, as consumers bought less apparel from Macy’s and digital sales growth decelerated from the prior period. The department store chain cautioned same-store sales of its owned and licensed stores could fall by a low to mid-20s percentage during the fall season overall.

Macy’s is trying to take advantage of the opportunity it sees in the retail industry with a number of its peers struggling and some, including Lord & Taylor, Neiman Marcus and J.C. Penney, filing for bankruptcy protection this year. It has said it plans to invest in its Bloomingdale’s business, which caters to more high-end consumers, by opening additional off-mall locations in 2021, eyeing luxury market share up for grabs. Meantime, it is still opening more off-mall, Macy’s Backstage locations that compete with retailers such as TJ Maxx and Ross Stores in the discounted apparel sector.

But what Macy’s must do best during the 2020 holidays is compete online, with the likes of Amazon, Target and Walmart. Shoppers are buying more gifts on the web than in stores this year. And if Macy’s can’t meet customers on the internet, its entire business will struggle, and it faces potentially additional store closures in the new year. After the 2019 holidays, Macy’s announced more than two dozen store closures.

Market cap: $2.4 billion
Year-to-date stock performance: Up 9%

Bed Bath & Beyond has reaped the benefits of more consumers stocking up on home goods, cleaning supplies, kitchen accessories and other essentials during the pandemic.

Under CEO Mark Tritton, the company has in a matter of months reshaped its C-suite with a slate of new executives, sold noncore parts of its business, including Christmas Tree Shops and Linen Holdings, and ramped up investments in its supply chain to be able to meet demand online and deliver items faster. In its latest quarter ended Aug. 29, Bed Bath & Beyond reported its first same-store sales increase in nearly four years, as its online business surged more than 80%.

But Bed Bath & Beyond needs to prove it can hold its own beyond the pandemic. This holiday season, though it is not considered a top destination for gift-giving, Bed Bath & Beyond needs to show that its investments in services such as same-day delivery and curbside pickup are paying off. With more consumers looking to spruce up their living spaces during the pandemic, Bed Bath & Beyond has said it is stocking its shelves with more home goods and decor. Selling more inventory in those categories would be a welcome boost to sales.

In late October, during a meeting with investors, Bed Bath & Beyond said it expects its same-store sales to be “stable” in fiscal 2021 and rising in the low to mid-single digits by 2023. As part of its turnaround, it plans to launch more than 10 private-label brands starting next year. It will make $1 billion to $1.5 billion in capital investments over the next three years — to fix what many observers viewed as an out-of-date business before Tritton arrived. A strong holiday season would position Bed Bath & Beyond well on its way to achieving its goals, while poor performance would create another obstacle for Tritton and his newly refurbished team to work through.

Market cap: $5.8 billion
Year-to-date stock performance: Down 28%

Kohl’s finds itself in a unique spot this holiday season.

It has momentum at its back after announcing a partnership with the makeup retailer Sephora in which it will open some 200 Sephora mini shops at Kohl’s locations by next fall, rising to at least 850 sites by 2023.

While its peers in shopping malls have struggled more through the pandemic, Kohl’s reaped some benefits from having 95% of its more than 1,000 stores located off-mall. Many consumers are less anxious about visiting big-box stores in open-air shopping centers that are shorter drives from their homes. Kohl’s continues to view that positioning as a key advantage, especially in the years ahead, as some malls anchored by department stores become extinct.

Kohl’s must still fight to get back to growth, though, with its business taking a hit, like many of its peers this year. During the period ended Oct. 31, it reported a same-store sales decline of 13.3%, despite robust growth online. Kohl’s did report positive sales growth in three categories, however: athleisure, loungewear and sleepwear. And it has big goals to grow both its active and beauty divisions in the months ahead.

Its tie-up with Amazon could prove to be an especially strong catalyst this holiday season, as more orders are being placed on Amazon, which could result in more returns. And every Kohl’s store now serves as a hub to accept those returns. The true test will be whether shoppers come to Kohl’s stores to shop.

There is another set of retailers in a more dire position this holiday season than Gap and Kohl’s. A handful of companies are at risk because of their weak finances, flashing warning signs to analysts — especially those that monitor credit profiles.

“We started the year with the bigger, better-capitalized companies taking share from more high-leverage companies,” Mickey Chadha, a senior credit officer at Moody’s Investors Service, said in an interview Wednesday.

“Then, you fast-forward to the pandemic … and every trend that was going on in retail just got accelerated,” he said. “All the changes that were supposed to happen in a number of years just got stuffed into this small period of time.”

As a result, Moody’s list of distressed names in retail has shrunk over the course of the year, Chadha said. “Not because the overall retail and apparel space got stronger, but because a lot of the weaker players just fell off” and into bankruptcy, he said.

Dozens of consumer-facing companies, including Guitar Center, Francesca’s and J.Crew, have filed for bankruptcy protection this year. A number of companies are still at risk, according to Moody’s, based on their credit profiles, profitability or lack thereof, competition, e-commerce capabilities, product offerings and ability to scale.

That could mean more bankruptcies in 2021. These companies also stand to fight their way back into a healthier position in the new year, and they are ones to watch.

Here’s a list of retailers in distress, as compiled by Moody’s, along with their credit profile ratings (Caa1 and Caa2 both mean “rated as poor quality and very high credit risk”):

1. Belk, Caa1
2. Beverages & More, Caa1
3. Jo-Ann Stores, Caa1
4. Party City Holdings, Caa1
5. The Fresh Market, Caa1
6. MED ParentCo., Caa1
7. Midas Intermediate Holdco II, Caa1
8. Rite Aid, Caa1
9. 99 Cents Only Stores, Caa1
10. NMG Holding, Caa1
11. Petco Animal Supplies, Caa1
12. Jill Acquisition, Caa2
13. SHO Holding, Caa2

Read more of CNBC’s holiday coverage here.