Pier 1 Imports Owner Invests in Local Retailer Tuesday Morning in $32M Deal

California-based Retail Ecommerce Ventures—which owns Pier 1, Stein Mart, Linens ‘n Things, and RadioShack, among other companies—is making a strategic investment in Tuesday Morning and its 490 stores in 40 states through a $32 million convertible debt financing deal.

“We believe this milestone transaction will strengthen our financial position and provide sufficient liquidity to execute on our strategic plan, allowing us to maintain strong relationships with our valued partners and elevate offerings for our customers,” says Fred Hand, Tuesday Morning’s CEO.

Dallas-based retailer Tuesday Morning Corporation is getting a new backer following its emergence from bankruptcy—one that’s familiar with the business and also owns local consumer brands Pier 1 Imports and RadioShack.

The publicly traded home goods and décor brand has inked a $32 million convertible debt financing deal with a newly formed special purpose vehicle from California’s Retail Ecommerce Ventures, the owner of companies like Linens ‘n Things, Stein Mart, and Ayon Capital.

“We believe this milestone transaction will strengthen our financial position and provide sufficient liquidity to execute on our strategic plan, allowing us to maintain strong relationships with our valued partners and elevate offerings for our customers,” Fred Hand, Tuesday Morning’s CEO, said in a statement.

Tuesday Morning looks to e-commerce

In addition to the new funding from Retail Ecommerce Ventures, Hand and other members of Tuesday Morning’s leadership team are also providing $3 million in convertible debt financing.

As part of the deal, Tuesday Morning will reshuffle its board, with Retail Ecommerce Ventures and Florida-based Ayon Capital to later appoint designees that will make up the majority of the board. In addition, the company said it will look to build out an e-commerce and digital presence using Retail Ecommerce Venture’s fulfillment network, infrastructure, and technology, alongside a new licensing agreement that will allow it sell Pier 1 products.

Due to its business model of buying closeout items from others—which means its inventory changes often—Tuesday Morning has shied away from e-commerce in the past, The Dallas Morning News reports.

Omnichannel push will complement Tuesday Morning’s store footprint

Tuesday Morning said the deal, which is expected to close next week, will help strengthen its balance sheet, with an omnichannel push helping to complement its “store footprint in the long-term.”

“REV is excited to make this investment as we see tremendous long-term opportunity for Tuesday Morning in the home goods and décor category, especially as more consumers expect an omnichannel experience in the post-pandemic world,” Retail Ecommerce Ventures co-founders Tai Lopez and Alex Mehr said in a joint statement. “We look forward to making our transformation expertise, technology capabilities and the Pier 1 brand available to the company.”

Tuesday Morning emerged from bankruptcy last year

The announcement comes after Tuesday Morning began exploring restructuring options that included a potential bankruptcy filing after previously filing for bankruptcy last year, Bloomberg reported. The company exited from Chapter 11 bankruptcy in 2021, fueled by more than $245 million in funding that included a sale-leaseback for its headquarters and warehouse facilities, along with a secured credit facility.

Operates nearly 490 stores in 40 states

Operating nearly 490 stores across 40 states, Tuesday Morning reported $587.9 million in net sales so far this year—an increase of more than $74 million compared to the first nine months of 2021. However, in its Q3 financial reports, the company said it expects store sales to decrease between 3% and 5% in the fourth quarter when compared to the same timeframe last year, with an expected EBITDA loss between $26 million and $29 million for the 2022 fiscal year.

“Ayon is pleased to partner with REV and Tuesday Morning’s management team to fund the Company’s evolution,” Sidd Pagidipati, Ayon Capital chairman, said in a statement. “Tuesday Morning has a history of delighting customers and offering unique value in the home goods category. By making this significant investment, we are excited to be part of the next chapter at Tuesday Morning.”

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