<![CDATA[This study aims to examine financial distress in the Indonesian retail sector during the 2020-2024 transition period, focusing on the "growth anomaly," in which increases in sales volume often do not correlate with financial health. Using the Zmijewski Model as a failure-risk measurement instrument and the Partial Least Squares-based Structural Equation Modeling (PLS-SEM) approach, this research examines the impact of leverage, liquidity, and sales growth on financial distress, with profitability as a mediating variable. The results indicate that leverage has an absolute positive and significant effect on financial distress (coefficient 1.000) and a significant negative effect on profitability. A crucial finding reveals that profitability fails to serve as a mediator in mitigating the risk of financial failure. This is due to the absolute dominance of debt burdens that automatically determine the firm's distress status before being influenced by earnings efficiency, alongside a "broken mediation chain" where sales growth and liquidity have no significant effect on profitability. An R-square value of 1.000 for the financial distress variable proves the model's perfect accuracy in capturing the risk dynamics of retail issuers trapped in aggressive capital structures.]]>
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