Retailer files Chapter 11 bankruptcy

Retailer files Chapter 11 bankruptcy

[ad_1]

rssfeeds.usatoday.com

CLOSE

U.S. retail sales tumbled by a record 16.4% as business shutdowns caused by the coronavirus kept shoppers away, further weighing down a sinking economy. An analyst from Columbia Business School sees the decline as ‘just the beginning.’ (May 15)

AP Domestic

Off-price retailer Tuesday Morning filed for Chapter 11 bankruptcy protection on Wednesday with plans to close more than a third of its stores.

Tuesday Morning had been struggling when the coronavirus pandemic began and went into a free fall when it was forced to temporarily close its locations due to the crisis.

The company joins a growing list of retailers that have tumbled into Chapter 11 bankruptcy during the pandemic, including J.C. Penney, Neiman Marcus and J. Crew. In each case, the companies were already in rough shape before the pandemic began due to excessive debt and declining foot traffic.

Tuesday Morning – which sells a wide variety of merchandise including home decor, bath and body goods, crafts, food and toys – hopes to stay in business while using the bankruptcy process to restructure its operations.

The company plans to permanently close about 230 of its 687 stores this summer. Of those, it has already identified 132 that will be shuttered.

J.C. Penney announces new home brand: Still planning store closings in bankruptcy

Store closings: Victoria’s Secret to close about 250 stores in the U.S. and Canada

“These stores were identified as underperforming or are situated in areas where too many locations are in close proximity,” the company said in a statement.

It will identify the next hundred or so to close after completing an effort to renegotiate leases.

Although about 80% of its stores have reopened, Tuesday Morning said the “immense impact of COVID-19” created “an insurmountable financial hurdle” as it tried to reinvent itself without court protection from its creditors.

“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,” CEO Steve Becker said in a statement. “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.”

One encouraging sign for the company is that sales at reopened stores have increased by about 10%, compared with the same period a year earlier, since they resumed operations.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

Read or Share this story: https://www.usatoday.com/story/money/2020/05/27/tuesday-morning-store-closings-chapter-11-bankruptcy/5264995002/



[ad_2]

Source link

Published
Categorized as Business

By Bernice Caldwell

Bernice is one of the finest authors Industry News Today portal has until now. Bernice's linguistic and well-written technique is one of the plus points that have the readers glued to her articles. Bernice currently heads the Healthcare and Services domain as her knowledge on the medical topics is immense. She has just joined the Industry News Today portal 6 Months back but the love for writing can be very well seen. She may be short on experience but it has definitely not stopped her from presenting some of the finest articles. Bernice is currently a very well-known personality on the portal to have shown her skillful writing in such a limited time span.

Leave a comment

Your email address will not be published. Required fields are marked *