Dallas — Tuesday Morning Corp. (NASDAQ: TUES) has filed for Chapter 11 bankruptcy protection. The Dallas-based retailer says the actions are in response to “the immense strain the COVID-19 pandemic and related store closures have put on the business.”
Tuesday Morning is a discount home furnishings chain. The company opened its first store in 1974 and currently operates 687 stores in 39 states. The retailer expects to permanently close approximately 230 stores to focus on high-performing locations. The phased store closures will take place this summer.
Following the temporary closure of its entire store portfolio March 25 as a result of COVID-19, Tuesday Morning has reopened more than 80 percent of its existing store footprint and expects to continue store reopenings and bringing associates back to work over the coming weeks. Tuesday Morning says that comparable store sales for the reopened stores have been approximately 10 percent higher than sales during the same period in fiscal 2019. The retailer began reopening stores April 24.
“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,” says Steve Becker, the company’s CEO. “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.”
To enable Tuesday Morning to continue operations during the reorganization process, the company has obtained a commitment from its existing lender group to provide $100 million of debtor-in-possession financing. Tuesday Morning is required to obtain a commitment for up to $25 million of additional financing, which it is negotiating.
Haynes and Boone LLP is serving as legal advisor, Miller Buckfire as financial advisor and AlixPartners LLP as restructuring advisor.
Tuesday Morning’s stock price closed at $0.25 per share Tuesday, May 26, down from $1.53 per share one year ago. In early 2015, the company’s stock price was over $20 per share.
— Kristin Hiller