Discount goods retailer Tuesday Morning has filed for bankruptcy, the fifth major retailer to seek Chapter 11 protection since theshuttered businesses around the U.S.
As part of the the company's reorganization plan, the Dallas-based chain said Wednesday it plans to close 230 of its 687 stores over the summer to focus on better performing locations. Tuesday Morning joins J.C. Penney, luxury department store chain, and Stage Stores in filing for Chapter 11 since the virus was declared a pandemic in mid-March. Pier 1 Imports, which in February, is now liquidating its business.
Tuesday Morning has requested bankruptcy court approval to close at least 132 locations in a first phase and, eventually, the company's distribution center in Phoenix that supports the stores. The stores set to close were identified as under-performing or situated in areas where too many locations are close.
Tuesday Morning, which generated about a billion dollars in annual sales in its latest fiscal year, also plans to renegotiate store location rental leases during bankruptcy. Of the remaining 555 stores, the company plans to exit about 100 additional locations leaving a chain of roughly 450 stores.
"The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business," CEO Steve Becker said in a statement.
Becker noted that prior to the pandemic, Tuesday Morning was gaining momentum in its merchant organization, growing its supplier base and improving brands, assortment and value for its customers, while investing in its technology and corporate leadership.
"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," he said.
Tuesday Morning said it has reopened over 80% of its existing stores and expects to continue reopenings and bringing employees back in coming weeks. The company temporarily closed its stores March 26. Tuesday Morning said that it has a commitment from its existing lender group to provide $100 million in financing to keep it operating during bankruptcy.
J.C. Penneyearlier this month. Stores will remain open as the company attempts restructure. The retail chain, which has been declining for years amid the growth in e-commerce, has closed numerous stores in recent years to cut costs.