For the second time in less than three years, off-price retailer Tuesday Morning has filed for Chapter 11 bankruptcy.
The company filed Tuesday in U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, citing its “exceedingly burdensome debt,” as the need for reorganization. Along with the filing, Tuesday Morning reported it has obtained a $51.5 million commitment of debtor-in possession funding from Invictus Global Management to support operations during the bankruptcy.
“Fortunately, we have the support of a committed capital provider in Invictus and a clear vision for transforming into a focused retailer that serves its core, heritage markets in a profitable manner,” said Tuesday Morning CEO Andrew Berger in a news release from the company. “We look forward to taking steps that enable us to emerge as a stronger retailer that draws on a legacy of offering a unique off-price value proposition to our loyal customer base.”
According to the company’s statement, Tuesday Morning plans to optimize its store footprint and focus on its core and heritage markets. This will include closing stores in low-traffic areas while reallocating additional resources to locations in high-traffic regions. The retailer also said it plans to enact new efficiencies and cost reductions, as well as pivoting to a third-party logistics model.
Tuesday Morning previously filed for Chapter 11 bankruptcy in May 2020 and emerged in January 2021. In September 2022, the retailer entered an agreement to secure $32 million in convertible debt financing from a special purpose vehicle formed by Retail Ecommerce Ventures. The agreement allowed Retail Ecommerce Ventures (REV)—which owns brands such as Pier 1, Linens ’n Things, Stein Mart, Modell’s Sporting Goods, and Ayon Capital, LLC—to take control of the Tuesday Morning brand and temporarily stop the bleeding.
In November 2022, Tuesday Morning’s top three executives—CEO Fred Hand, COO Mark Katz and Paul Metcalf, principal and chief merchant—reportedly “decided to retire” after the company’s problems piled up. Berger, who also served on the retailer’s board took, on the CEO role with Bill Baumann taking over as COO and assuming responsibilities for Metcalf’s role.
Tuesday Morning closed out fiscal 2022 with an 8 percent decline in the fourth quarter, with net sales dropping from $177 million during the same period the previous year to $162 million in 2022.