Tuesday Morning Files Chapter 11 In US For Reorganisation
Dallas, Texas-based Tuesday Morning Corporation recently announced it will pursue financial and operational reorganisation designed to allow the company to reduce its outstanding liabilities and strengthen its overall financial position. These actions are in response to the immense strain the COVID-19 pandemic and related store closures have put on the business.
The company is one of the original off-price retailers specialising in name-brand, high-quality products, including upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal décor, for homes at prices generally below those found in boutique, specialty and department stores, catalogues and online retailers.
To pursue this reorganisation, Tuesday Morning filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code. The process will offer the company an opportunity to continue navigating the pandemic and emerge as a stronger company by early fall this year, it said in a statement.
To enable itself to continue operations during the reorganisation process, the company has obtained a commitment from its existing lender group to provide $100 million of debtor-in-possession (DIP) financing. As required by the DIP agreement, the company is required to obtain a commitment for up to $25 million of additional financing, which the company is negotiating.
Following the closure of the entire store portfolio as a result of COVID-19, Tuesday Morning has re-opened over 80 per cent of its existing store footprint and expects to continue store re-openings and bringing associates back to work over the coming weeks.
It plans to attempt to renegotiate a significant number of leases during this process. Of the remaining 555 stores, the company plans to exit approximately 100 additional locations leaving a go-forward footprint of approximately 450 stores.
This realignment will allow Tuesday Morning to improve its product offering by focusing on the highest performing stores in its most productive markets, provide greater value to customers by sending the best deals to a smaller number of stores, and enhance the overall profitability and credit worthiness of the Company with resources directed at its most profitable stores, the company added.