Off-price retailer Tuesday Morning Corp. has filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code in response to the strain the COVID-19 pandemic and related store closures have put on the company.
Tuesday Morning announced it will pursue financial and operational reorganization designed to allow the Company to reduce its outstanding liabilities and strengthen its overall financial position.
As part of the the company’s reorganization plan, the Dallas-based chain said Wednesday it plans to close approximately 230 of its 687 stores to focus on high-performing locations and will do this with a phased approach.
The store closure process will take place over the summer. The company has requested bankruptcy court approval to close at least 132 locations in a first phase and, eventually, the company’s distribution center in Phoenix that supports these stores. These stores were identified as underperforming or are situated in areas where too many locations are in close proximity.
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Steve Becker, Chief Executive Officer, stated, “The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business. 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.”
Mr. Becker continued, “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. The commitment from our lenders to provide access to significant capital demonstrates faith in our value-driven business model and iconic brand. Looking ahead, we’ve been encouraged by very positive performance of the business as we continue to re-open our doors and welcome back our dedicated customers.”
Based in Dallas, Texas, the Company opened its first store in 1974 and currently operates 687 stores in 39 states.