Off-price retailer Tuesday Morning has filed for Chapter 11 bankruptcy protection and will close approximately 230 of its 687 stores. The closures aren’t expected to begin until summer, and the company will continue its reopening efforts during the bankruptcy process.
Tuesday Morning, like several other retailers that recently filed for bankruptcy protection, was hit hard by the COVID-19 pandemic. The company closed all of its stores, though 80% of its footprint has become operational since its reopening process began on April 24. Tuesday Morning reported 10% higher year-over-year sales at its reopened stores, and hopes to build on this momentum to fuel its turnaround effort.
“The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” said Steve Becker, CEO of Tuesday Morning in a statement. “Prior to the pandemic, we were gaining momentum in our merchant organization, growing our vendor base and improving brands, assortment and value for our customers, while investing in our technology and corporate leadership team. However, the complete halt of store operations for two months put the company in a financial position that can be effectively addressed only through a reorganization in Chapter 11.”
The retailer has secured $100 million in debtor-in-possession financing to continue operating during the restructuring process. Tuesday Morning is aiming to focus on its highest-performing stores by sending its best deals to a smaller number of locations in the most profitable markets. The retailer also will seek to negotiate its leases at a “significant” number of the remaining locations.