Off-price retailer Tuesday Morning has filed for bankruptcy with plans to close 230 stores
by Madeline Stone- Off-price retailer Tuesday Morning filed for Chapter 11 bankruptcy on Wednesday.
- It said it would close approximately 230 of its 687 stores permanently.
- As a retailer deemed "nonessential" during the coronavirus pandemic, it had temporarily closed all of its locations in March. It had begun to reopen locations in May.
- It had until Tuesday to repay about $42 million in loans.
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Off-price retailer Tuesday Morning has filed for Chapter 11 bankruptcy. The company plans to close approximately 230 of its stores.
It said in a press release on Wednesday that it had requested court approval to shutter at least 132 stores in the first round of closures this summer. It is also looking to close the Phoenix distribution center for the affected stores.
Tuesday Morning said in filings with the Securities and Exchange Commission earlier in May that it was seeking additional financing. The Wall Street Journal previously reported on May 23 that the chain, which has nearly 700 stores in 39 states, was preparing for bankruptcy.
On Wednesday, Tuesday Morning said it had secured $100 million of debtor in possession financing as part of its bankruptcy filing.
Like other retailers deemed "nonessential" amid the coronavirus pandemic, Tuesday Morning temporarily closed all of its locations and furloughed most of its 9,000 employees in March. It does not have an e-commerce business, making the temporary store closures particularly devastating.
Tuesday Morning began to reopen stores as state governments allowed it at the end of April. The company said that comparable sales at reopened stores have been about 10% than in the same period last year. More than 7,300 workers have returned from furlough.
"The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business. Prior to the pandemic, we were gaining momentum in our merchant organization, growing our vendor base and improving brands, assortment and value for our customers, while investing in our technology and corporate leadership team," CEO Steve Becker said in a statement. "However, the complete halt of store operations for two months put the Company in a financial position that can be effectively addressed only through a reorganization in Chapter 11."
The retailer had until Tuesday to repay about $42 million in loans. Lenders including JPMorgan also required the company to retain a liquidation consultant and financial adviser, according to SEC filings.
Tuesday Morning had just over $1 billion in sales for the fiscal years 2018 and 2019. Its stores sell off-price home furnishings, home textiles, and seasonal decor. It's based in Dallas and was founded in 1974.
Becker's statement continued: "We plan to emerge from Chapter 11 in a stronger position as a leading home goods off-price retailer, providing unmatched value to our customers. The commitment from our lenders to provide access to significant capital demonstrates faith in our value-driven business model and iconic brand. Looking ahead, we've been encouraged by very positive performance of the business as we continue to re-open our doors and welcome back our dedicated customers."