Tuesday Morning files for Chapter 11 again, set to close ‘low-traffic’ stores
Dallas-based off-price retailer Tuesday Morning has filed for bankruptcy for a second time in three years.
The operator of 487 stores in 40 states sought bankruptcy protection Tuesday in the Fort Worth division of the U.S. Bankruptcy Court for the Northern District of Texas.
The company said it plans to close some stores and has received financing of $51.5 million from Austin-based Invictus Global Management to operate during the bankruptcy.
The company didn’t say how many stores it would close, but said it will “focus on optimizing its store footprint and focusing on core heritage markets.”
The plan is to close stores in “low-traffic regions” and reallocate resources to stores in “hightraffic regions.”
Andrew Berger, CEO of Tuesday Morning since November, blamed “exceedingly burdensome debt” for the decision and said the company can “emerge as a stronger retailer that draws on a legacy of offering unique offprice value proposition to our loyal customer base.”
The last time the company reported quarterly results it had cash of $6.9 million and long-term debt of $37.4 million as of Oct. 1.
The retailer has struggled since it reorganized when it filed for bankruptcy in May 2020 during the pandemic.
Its sales turned up as consumers were spending on their homes during the stay-at-home economy, but the company’s turnaround encountered supply chain issues and inflation. It’s also had several management changes.
In its 2020 reorganization, the retailer closed about 200 stores.
It isn’t surprising that Tuesday Morning is seeking a court-supervised reorganization.
The retailer delisted its stock from the Nasdaq in January, and said in December that it was burning through cash and was looking for a new source of funding.
Tuesday Morning almost filed for bankruptcy in September but received $35 million in new funds from Retail Ecommerce Ventures and Ayon Capital, which gave them control of the company.
In its initial filing Tuesday, it listed both assets and liabilities in the range of $100 million to $500 million.
Its 40 largest creditors — ranging from $220,148 to $1.4 million — are trade vendors or companies that provided it with merchandise and services.
With a smaller number of stores, the retailer said it would cut costs by shifting distribution operations to a third-party logistics company.
In recent years, Tuesday Morning consolidated its warehouse operations after a costly attempt to expand with a facility in Phoenix.
As part of its last reorganization, Tuesday Morning sold its North Dallas headquarters and warehouse facilities in Farmers Branch and Addison for $60 million.