Home goods retailer Tuesday Morning filed for Chapter 11 bankruptcy protection on Wednesday and plans to shut a third of its nearly 700 stores, saying the coronavirus pandemic has crippled its business.
The Dallas-based company joins a growing list of retailers that have landed in bankruptcy court during the crisis, including department store chains Neiman Marcus, Stage Stores and J.C. Penney, and apparel maker J.Crew.
"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.
Tuesday Morning said it plans to permanently shut about 230 stores and exit Chapter 11 in the early fall with roughly 450 locations. It added that it plans to attempt to renegotiate a "significant" number of its existing leases with landlords during the restructuring process.
Tuesday Morning said it has secured $100 million in debtor-in-possession financing from its lenders to help it through bankruptcy. As required by its DIP agreement, it said it must obtain a commitment for up to $25 million of additional financing, which it is currently negotiating.
The company said it has reopened more than 80% of its stores that had been shuttered during the pandemic, with over 7,300 people returning to work. The number of workers who will be affected by the bankruptcy and store closures was not announced.
More retail bankruptcies are expected to be on the way, as many businesses' sales have shrunk drastically during the crisis, with stores forced to shut and consumers holed up at home.
The chairman of mall owner Related Cos., Stephen Ross, told CNBC on Tuesday: "You are going to have such a flood of cases going to the bankruptcy court. ... And these aren't really the type of bankruptcies that were induced by bad practices. It's really all driven by the pandemic."