Christmas Tree Shops, which filed for Chapter 11 bankruptcy on May 5, reportedly plans to emerge from the process with most stores open, according to The Wall Street Journal. The retailer, which currently operates 82 stores, is aiming to close 10 underperforming stores during bankruptcy before emerging from Chapter 11 in August 2023. It has no plans to seek a buyer.
Christmas Tree Shops filed for bankruptcy with a $45 million loan, including about $20 million in fresh capital, to help it get through the process, Co-Owner and Chairman Marc Salkovitz told The Wall Street Journal. The loan, which is being provided by Eclipse Business Capital and ReStore Capital, will fund business obligations during the proceedings and is subject to bankruptcy court approval.
Salkovitz and Co-Owner Pam Salkovitz also are creditors to the company and plan to retain an ownership stake in the business. “This is strictly a financial restructuring,” said Salkovitz in an interview with The Wall Street Journal. “Our operations are sound.”
Christmas Tree Shops, which the Salkovitzs acquired from Bed Bath & Beyond in 2022, has been under pressure due to rising inflation. Higher prices had a significant impact on the retailer’s core demographic, according to Salkovitz.
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Some Christmas Tree Shops locations are still subleased from Bed Bath & Beyond, which filed for bankruptcy in April and is currently winding down all locations. As a result, these leases will need to be negotiated directly with landlords for the first time, according to Salkovitz.
This year has seen several retailers enter bankruptcy proceedings with worse prospects than Christmas Tree Shops. In addition to Bed Bath & Beyond, David’s Bridal is planning to shutter all stores if it can’t find a buyer, and Tuesday Morning has received permission from a bankruptcy court judge to wind down its operations.
