Tuesday Morning, focused on off-price home goods, has filed Chapter 11 bankruptcy with plans to permanently close about 230 of its 687 stores. The retailer cites the prolonged closure of its stores amid COVID-19 as an “insurmountable financial hurdle.”
“The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” CEO Steve Becker said. “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. 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.”
Becker said the company will plan to exit bankruptcy this fall with roughly 450 stores. The first store closures will begin this summer starting with 132 including two locations in central Arkansas. The stores at Kroger Center in Conway and Bowman Heights Shopping Center in Little Rock will be among the first wave of closures. Stores in Fayetteville, Fort Smith, Jonesboro and Rogers have reopened and are not on the first list of closures.
The company will also shutter a distribution center in Phoenix that supplies the 132 stores being permanently closed.
Dallas-based Tuesday Morning began reopening its stores April 24 and, to date, has reopened about 80% of its locations. Comp sales for the reopened stores are running about 10% higher than the year-ago period, Becker said.
The company has secured $100 million in debtor-in-possession financing from its lenders to help it get it through bankruptcy. As required by the DIP agreement, Tuesday Morning must obtain a commitment for up to $25 million of additional financing, which the company is negotiating.
“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,” Becker said. “The commitment from our lenders to provide access to significant capital demonstrates faith in our value-driven business model and iconic brand.”
The Tuesday Morning filing comes on the heels of Pier One closing all of its home goods retail locations. The company is also the fifth Texas-based retailer – JCPenney, Stage Stores, Neiman Marcus and Pier One – to file bankruptcy and announce store closures amid the COVID-19 outbreak.