Another Retail Casualty Of Coronavirus: Tuesday Morning Files For Bankruptcy, Plans To Close 230 Stores

Off-price home goods retailer Tuesday Morning (TUES) has filed for Chapter 11 bankruptcy protection under what it said was “immense strain” caused by the coronavirus pandemic

Tuesday Morning said it expects to emerge from the bankruptcy filing by early fall 2020 and will close a number of stores as part of a restructuring measure that will allow it to become a “stronger company” as it continues to navigate the COVID-19 pandemic.

As part of its Chapter 11 restructuring, Tuesday Morning said it will “realign its store footprint” by closing about 230 of its 687 stores over the course of the summer. The stores will be closed in a phased approach, which will allow the company to focus on its better-performing stores.

A total of 132 stores are expected to close in the first phase of the plan, with a Phoenix-based distribution center also set to close. Tuesday Morning will also work to renegotiate its lease terms on its remaining 555 stores with the shuttering of about 100 additional locations to leave a total retail store footprint of about 450 locations.

Tuesday Morning has secured $100 million in debtor-in-possession financing from its existing lenders and is required to obtain a commitment for about $25 million, which the company said it is currently negotiating.

Tuesday Morning closed all of its stores in March as the coronavirus forced retail businesses across the U.S. to shut their doors. The company said that currently, over 80% of its stores have been reopened with plans in place to reopen the remaining locations in the coming weeks.

“The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” Steve Becker, CEO at Tuesday Morning, said in a statement. “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.

“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 reopen our doors and welcome back our dedicated customers,” he added.

Tuesday Morning joins JC Penney, J. Crew, Stage Stores, and Neiman Marcus in filing for Chapter 11 bankruptcy protection during the coronavirus pandemic.