Tuesday Morning becomes fifth big retailer to file Chapter 11

Discount goods retailer Tuesday Morning has filed for Chapter 11 bankruptcy, the fifth major retailer to do so since the pandemic began.

As part of the bankruptcy reorganization, the Dallas-based chain said Wednesday it plans to close approximately 230 of its 687 stores over the summer to focus on high-performing locations and will do this with a phased approach. It did not disclose which stores would be closed.

Tuesday Morning has 13 stores in Indiana, including three in Indianapolis, one in Carmel and one in Fishers.

Tuesday Morning joins J.C. Penney, luxury department store chain Neiman Marcus, J.Crew and Stage Stores in filing for Chapter 11 since the virus was declared a pandemic in mid-March, forcing many stores that sell non-essential goods to close and see sales evaporate. Pier 1 Imports, which filed for Chapter 11 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 these stores. These stores were identified as underperforming or are situated in areas where too many locations are in close proximity.

Tuesday Morning, which generated about $1 billion in annual sales in its latest fiscal year, also plans 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 network of roughly 450 stores.

“The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” said Steve Becker, chief executive officer at Tuesday Morning, in a statement.

Becker noted that, before the pandemic, the retailer 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 team.

“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 added.

Tuesday Morning said it has reopened over 80% of its existing store footprint to date and expects to continue store reopenings and bringing employees back to work over the coming weeks. It said 7,300 of its 9,000 furloughed employees have returned to work.

Tuesday Morning said  it has a commitment from its existing lender group to provide $100 million in financing to keep it operating during the bankruptcy process.