Tuesday Morning Corp. filed for Chapter 11 bankruptcy protection, citing the prolonged closure of its stores amid the COVID-19 pandemic as an "insurmountable financial hurdle."
The off-price home goods retailer, which has been struggling pre-pandemic, plans to permanently close about 230 of its 687 stores, or 33% of its total footprint, as part of the reorganization. The first wave of closings — at least 132 stores — will occur this summer (see end of article for list of locations) and also eventually include the company’s distribution center in Phoenix that supports the locations. Tuesday Morning said that it expects to exit Chapter 11 this fall with approximately 450 locations.
“The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” stated Steve Becker, CEO. “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.”
Tuesday Morning began reopening its stores on 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, according to the retailer.
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,” stated Becker. “The commitment from our lenders to provide access to significant capital demonstrates faith in our value-driven business model and iconic brand.”
Tuesday Morning’s filing comes a little over a week after J.C. Penney filed for Chapter 11.
These are the locations included in the first round of Tuesday Morning store closures, according to a report by USA Today.
Cullman: Town Square Shopping Center, 1646 Town Square SW
Gadsden: Riverview Plaza Shopping Center, 407 George Wallace Drive