Dallas-based Tuesday Morning Corp., one of the original off-price retailers specializing in name-brand, high-quality products for the home, announced that it’s seeking Chapter 11 bankruptcy protection.
This is the second Chapter 11 filing for Tuesday Morning since the onset of the COVID-19 pandemic in 2020 led to a sales slump.
The retailer plans to close more than half of its 487 stores nationwide—including two dozen in Texas—according a report by the Dallas Morning News. The DMN says four stores will close in Fort Worth, with other local closings happening in Bedford, Burleson, Garland, Granbury, Lewisville, Plano, and Hurst.
$51.5M commitment from Invictus Global
Tuesday Morning said it has obtained a commitment from Invictus Global Management LLC to provide $51.5 million of debtor-in-possession financing to support ongoing operations during the proceedings, subject to approval of the bankruptcy court.
“After considering how best to address Tuesday Morning’s exceedingly burdensome debt, we’ve determined that the best path to reorganizing and transforming the company begins with a Chapter 11 filing,” CEO and Director Andrew Berger said in a statement.
“Fortunately, we have the support of a committed capital provider in Invictus and a clear vision for transforming into a focused retailer that serves its core, heritage markets in a profitable manner,” Berger added. “We look forward to taking steps that enable us to emerge as a stronger retailer that draws on a legacy of offering a unique off-price value proposition to our loyal customer base. We appreciate all the support of our employees, customers, creditors and other partners as we seek to sustain commercial operations with minimal disruptions.”
Operating 487 stores in 40 states
Tuesday Morning opened its first store in 1974 and operates 487 stores in 40 states. Its products include upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal décor, at prices generally below those found in boutiques, specialty and department stores, catalogs, and online retailers.
Aiming to transform into ‘a nimbler, profitable retailer’
The company said its aim is for filing to enable it to reduce its outstanding liabilities, obtain needed capital, and transform into a “nimbler,” profitable retailer.
“We look forward to playing an important role in reorganizing and transforming Tuesday Morning. As a Texas-based investment firm with strong roots in the state, we have long admired Tuesday Morning’s strong connection to customers seeking unique home goods at competitive prices,” Invictus Partner Amit Patel said in a statement. “Andrew and his leadership team have our full support as they guide the Company through this process and lay a foundation for a brighter future.”
Optimizing its store fleet and distribution footprint
Tuesday Morning said that while restructuring, it plans to focus on optimizing its store fleet and distribution footprint and focusing on its core and heritage markets.
It intends to close stores in low-traffic regions while allocating resources to remaining stores in high-traffic regions. Tuesday Morning said it believes this targeted approach to winding down unprofitable and underperforming stores will position it to emerge from bankruptcy with a profitable, cash-generating store fleet that serves its most engaged and loyal customers.
Pivoting to a ‘third-party logistics model’
Tuesday Morning said it plans to realize significant cost reductions and new efficiencies across its distribution channels by focusing on a narrower set of high-performing stores. It said it expects to pivot to a third-party logistics model and transition to a more cost-effective inventory acquisition strategy for remaining stores.
The retailer said that Munsch Hardt Kopf & Harr PC is serving as its legal adviser, and Vinson & Elkins LLP is serving as legal adviser to Tuesday Morning’s Special Committee. Piper Sandler is Tuesday Morning’s financial adviser.
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