Home goods retailer Tuesday Morning on Wednesday joined the swelling ranks of retailers bankrupted by the coronavirus pandemic after filing a voluntary Chapter 11 petition, with plans to shutter 230 stores.
The stores closures represent over one-third of its total store base, which number 687 across 39 states prior to the filing. The home goods discounter and six affiliates filed their petitions in a federal bankruptcy court in Dallas. The retailer’s upscale home merchandise includes home textiles and furnishings, bath and body items, housewares, gourmet food, toys, crafts and seasonal decor.
The retailer closed its stores in March after state and local governments issued shelter-in-place orders. It started reopening stores in late April, with about 80 percent of its doors now reopened and more than 7,300 store associates back to work. The company said it expects to continue store re-openings and bring back more store staff over the coming week. But with at least 132 locations slated to be closed and another 100 still to be identified, there is no indication yet on how many employees would be impacted by permanent store shutdowns.
Before the coronavirus pandemic, the home discounter was working on growing its vendor base and improving brand assortment. “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,” CEO Steve Becker said. “Looking ahead, we’ve been encouraged by the very positive performance of the business as we continue to re-open our doors and welcome back our dedicated customers.”
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Reopened stores are generating comparable-store sales 10 percent higher than a year ago. Tuesday Morning is hoping to exit Chapter 11 proceedings this fall with about 450 locations in operation. It will use the bankruptcy process to try to renegotiate a number of its existing leases with landlords. It has a $100 million debtor-in-possession financing facility from its lenders, but is required to secure another commitment of up to $25 million in additional financing, for which it is currently in negotiations .
Based in Dallas, the company opened its first stores in 1974.
The voluntary petition lists creditors totaling between 1,000 to 5,000, with estimated assets at $92 million and estimated liabilities at nearly $88.4 million.
The top ten creditors holding unsecured trade claims include: Revman International Inc., Spartanburg, S.C., $1.39 million; Three Hands Corp., Sylmar, Calif., $889,903; American Crafts, Cincinnati, Ohio, $823,657; Trade Lines Inc., South Plainfield, N.J., $819,109; L R Resources Inc., Dalton, Ga., $810,943; Home Dynamix, North Arlington, N.J., $780,062; Nourison Industries Inc., Saddle Brook, N.J., $743,599; Privilege International Inc., S. Gate, Calif., $684,953; Blue Ridge Home Fashions Inc., Irwindale, Calif., $672,405, and Sun N Sand Accessories, Grand Prairie, Tex., $656,518.
Tuesday Morning is the latest retailer, hard hit by COVID-19, that has turned to Chapter 11 for relief. J. Crew Group, Neiman Marcus Group, Stage Stores Inc. and J.C. Penney Co. Inc. all filed for bankruptcy this month. Meanwhile, Vida Shoes, parent to Jambu and BCBGMaxAzria, resorted to layoffs and salary cuts amid a restructuring Tuesday.