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Tuesday Morning files for bankruptcy and will close 230 stores

By Jordan Valinsky, CNN Business

    (CNN) -- Discount home goods retailer Tuesday Morning filed for bankruptcy, blaming Covid-19 for prolonged store closures that caused an "insurmountable financial hurdle."

The Dallas-based chain said Wednesday it will permanently close approximately 230 of its nearly 700 US stores in cities where "too many locations are in close proximity." The first phase of closures, which includesaround 130 stores, will begin this summer.

Tuesday Morning CEO Steve Becker said the business was thriving before the pandemic led totemporary store closures and employee furloughs that had "severe consequences on our business."

"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 in a statement.

The retailer aims to use the bankruptcy process to renegotiate a "significant number" of leases and will have around 450 stores left after the process is complete. Tuesday Morning said it will emerge from bankruptcy with the intention of improving its product offering by "focusing on the highest performing stores in its most productive markets."

Tuesday Morning has reopened around 80% of its stores in recent weeks and has brought 7,000 employees back to work. It said sales are up 10% compared with the same time period a year earlier.

It's the latest retailer to file for bankruptcy because of the virus and shifting consumer demand. J. Crew, Neiman Marcus, JCPenney all filed in May.

Another home goods retailer, Pier 1, filed for bankruptcy in February. Last week, the company asked a bankruptcy court to cease its retail operations as soon as possible because of the damage caused by the virus.

The-CNN-Wire
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