The Massachusetts-based, discount home décor and furniture retailer has filed for Chapter 11 bankruptcy protection. As part of its reorganization, the company is seeking court approval to close 10 of its 82 store locations, with store closing sales to be completed by the end of June (see list at end of article). The filing comes nearly three years after Christmas Tree Shops was sold by Bed Bath & Beyond to Handil Holdings.
In court documents, the retailer described the bankruptcy as a “strictly financial restructuring.” It hopes to exit bankruptcy before the end of August.
“After careful consideration, we determined that availing ourselves of the Chapter 11 process was the best way to address our burdensome liabilities,” said Christmas Tree Shops chairman Marc Salkovitz. “This is strictly a financial restructuring. Our operations are sound.”
“The financial restructuring will reduce the company’s debt, better aligning its balance sheet with current market conditions that have been negatively impacted by slowing consumer demand fueled by inflationary pressures and increased interest rates,” the retailer stated.
In conjunction with the filing, Christmas Tree Shops has secured $45 million in debtor-in-possession financing from Eclipse Business Capital and ReStore Capital. The financing will provide the retailer with sufficient funding to maintain normal business operations during the Chapter 11 process.
“With the protections afforded by the Bankruptcy Code and the financing provided by our lenders, we will be able to satisfy our ongoing obligations to customers, vendors and employees,” said Salkovitz. “We are confident we will emerge a stronger business, better positioned to grow and prosper into the future.”
Salkovitz added that it will be “business as usual" while the chain works to complete its financial restructuring.
“Our customers will see no disruption in service or product quality, we will continue to honor all gift cards and our suppliers can expect timely payments,” he said.
Murphy & King, P.C. and Troutman Pepper are serving as the company’s legal advisors.
Christmas Tree’s bankruptcy filing follows that of two other big-box retailers: David’s Bridal and Bed Bath & Beyond.