Tuesday Morning (TUES) - Get Report filed for protection from creditors under Chapter 11 of federal bankruptcy law, citing an "insurmountable financial hurdle" created when the coronavirus pandemic forced it to close its stores.
The retailer, which started up in 1974, said it filed the petition in U.S. Bankruptcy Court for the Northern District of Texas in Dallas, its headquarters city.
The coronavirus has hammered the retail industry as states and municipalities enforced lockdown orders, requiring businesses to close and consumers to stay home.
As part of its filing, Tuesday Morning said that over the summer it would close 230, about a third, of its 687 stores across 39 states.
The company has asked the bankruptcy court to approve its effort to close at least 132 stores in a first phase, with plans to eventually close its Phoenix distribution center, which supports those stores.
On March 26 Tuesday Morning temporarily closed all its stores. That move came after it had closed about 400 of them to comply with state and local regulations. The company then reopened 80% of the stores.
"We plan to emerge from Chapter 11 in a stronger position as a leading home-goods off-price retailer," Chief Executive Steve Becker said in a statement.
"Looking ahead, we’ve been encouraged by very positive performance of the business as we continue to reopen our doors and welcome back our dedicated customers.”
"Since Tuesday Morning began reopening its stores on April 24, 2020," the company statement said, "comparable-store sales for the reopened stores have been approximately 10% higher than sales during the same period in fiscal 2019, and over 7,300 associates have returned to work."
Tuesday Morning said that to enable it to continue operating through the Chapter 11 process, its current lender group has committed to provide $100 million of debtor-in-possession financing.
The company also said it would attempt to renegotiate the leases on a "significant number" of stores during the bankruptcy process.
At last check Tuesday Morning shares were trading around 25 cents apiece.