Pier 1 owner acquires majority interest in Tuesday Morning
The owner of retailers including Pier 1 and Dressbarn is leading an investment group taking control of the Tuesday Morning board.
Retail Ecommerce Ventures, along with investors including Ayon Capital and Existing Management, are part of a group that intends to invest $35 million into the off-price retailer. That figure includes $32 million in convertible debt financing from a special purpose vehicle (SPV) formed by Retail Ecommerce Ventures, and
Tuesday Morning exited Chapter 11 at the beginning of 2021 after closing about 200 stores, and was relisted to the Nasdaq stock exchange in May 2021. Existing Tuesday Morning management, including CEO Fred Hand, are providing $3 million in convertible debt financing.
As a result, there will be a change in control of the company. The SPV will designate a majority of the Tuesday Morning board of directors at the closing of the transaction. The board of directors will be reconstituted as a nine-member board comprised of five directors designated by the SPV, three independent directors, and Fred Hand, Chief Executive Officer of Tuesday Morning. Tuesday Morning’s management team will remain in place under Hand as CEO.
Tuesday Morning expects to strengthen its balance sheet and begin executing an omnichannel strategy that will include an e-commerce presence and digital activations. In addition, the agreement includes a licensing agreement that will enable Tuesday Morning to sell Pier 1 products.
Tuesday Morning will also have access to REV’s fulfillment network, infrastructure and systems, as well as its technology and e-commerce capabilities. REV also owns retailers including Linens ‘n Things, Stein Mart, and RadioShack.
“We believe this milestone transaction will strengthen our financial position and provide sufficient liquidity to execute on our strategic plan, allowing us to maintain strong relationships with our valued partners and elevate offerings for our customers. We look forward to the partnership with REV and Ayon,” said Hand.
“REV is excited to make this investment as we see tremendous long-term opportunity for Tuesday Morning in the home goods and décor category, especially as more consumers expect an omnichannel experience in the post-pandemic world,” said Lopez and Mehr. “We look forward to making our transformation expertise, technology capabilities and the Pier 1 brand available to the company. Our experienced and proven team is the right partner at the right time for Tuesday Morning.”
“Ayon is pleased to partner with REV and Tuesday Morning’s management team to fund the company’s evolution,” said Sidd Pagidipati, chairman of Ayon. “Tuesday Morning has a history of delighting customers and offering unique value in the home goods category. By making this significant investment, we are excited to be part of the next chapter at Tuesday Morning, including its loyal customers and wonderful employees.”
The transaction is expected to close on or about September 19, 2022. The closing of the transaction is subject to the satisfaction of certain conditions and the companies are not guaranteeing that the transaction will be consummated.