Discount retailer Tuesday Morning filed for Chapter 11 bankruptcy this week and plans to shutter 230 of its stores due to the coronavirus pandemic, CNBC reported. Tuesday Morning said it plans to permanently close a third of its nearly 700 stores and exit Chapter 11 in the early fall with about 450 locations. During the restructuring process, the home goods retailer plans to renegotiate some of its existing leases as well. CNBC reported that Tuesday Morning obtained $100 million in debtor-in-possession financing from lenders to help the retailer through its bankruptcy. However, the company said it must secure an additional $25 million of financing as required by its DIP agreement, which it's currently negotiating.
Tuesday Morning has reopened more than 80 percent of its stores that had been temporarily closed during the pandemic to help stop the spread of coronavirus. By reopening its stores, 7,300 Tuesday Morning employees returned to work. It's unclear how many employees will be affected from the store closures and bankruptcy filing.
Total Retail's Take: With this announcement, Tuesday Morning joins a growing list of retailers permanently affected by the global pandemic. Others such as Stage Stores, Neiman Marcus, J.Crew, and J.C. Penney have also filed for bankruptcy over the past few weeks. Unfortunately, more retail bankruptcies are expected to be on the way as businesses continue to lose sales as a result of closed retail stores and slowing consumer spending. Now that Tuesday Morning (and many other retailers) has slowly begun to open back up many of its stores, it will be able to start fresh with a new strategy for the rest of 2020, emerging out of Chapter 11 as a strong, albeit leaner, company.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.