After Filing for Chapter 11 Bankruptcy, North Texas' The Container Store Says, 'We're Here To Stay'

After Filing for Chapter 11 Bankruptcy, North Texas’ The Container Store Says, ‘We’re Here To Stay’

The Coppell-based retail chain, a staple in home organizing solutions, is undergoing a financial reset after more than four decades in business. With $40 million in new funding, significant debt relief, and strong lender support, The Container Store says it's aiming to maintain operations without disrupting its customers or vendors.

After 46 years in business, Coppell-based The Container Store has filed for Chapter 11 bankruptcy protection while it undergoes a financial reset.

The retail chain and certain of its subsidiaries filed for voluntary protection in the United States Bankruptcy Court for the Southern District of Texas on Dec. 22.

Long known as a staple in home organizing solutions, The Container Store said it made the move to maintain operations without disruptions to customers or vendors.

Throughout the bankruptcy process, the company said, it will operate as usual and will continue providing products and in-home services to its customers without disruption. Its stores and website will continue to operate normally and all customer deposits and orders will be honored and delivered as normal, The Container Store said.

The reorganization plan, which is expected to be confirmed by late January, does not include the retailer’s Elfa business in Sweden, which continues to operate as usual.

“The Container Store is here to stay. Our strategy is sound, and we believe the steps we are taking today will allow us to continue to advance our business, deepen customer relationships, expand our reach, and strengthen our capabilities,” CEO Satish Malhotra said in a statement.

“We intend to maintain our strong workforce and remain committed to delivering an exceptional experience for our customers while we execute this recapitalization and for many years to come,” Malhotra said.

Anticipating new money, less debt

The Container Store said that at least 90% of its term loan lenders have entered into a transaction support agreement, pledging their backing for the in-court recapitalization.

Among other things, the recapitalization will provide The Container Store $40 million of new money financing, at least $45 million of deleveraging, and substantial debt service relief.

The company also said it has modified its asset-backed lending facility to add $40 million in upsized capacity.

The recapitalization will substantially strengthen its balance sheet and liquidity position to enable The Container Store to continue meeting its commitments to its partners, vendors, and stakeholders without disruption, the company said.

It will emerge as a private company under the ownership of its term loan lenders, the company said, with a healthy financial profile primed to drive long-term growth.

The New York Stock Exchange moved in December to delist shares of The Container Store, which in recent months had tried to bolster its financial position amid softening demand for its products.

Founded in 1978, The Container Store Group Inc. has more than 100 locations nationwide and a flagship online store. The company offers an exclusive portfolio of custom space lines that can be designed for any area of the home, and more than 10,000 products to complete any space.