2024-12-23 19:23:24 :
Dec 23 (Reuters) – Custom closet maker The Container Store filed for Chapter 11 bankruptcy protection as the retailer grapples with mounting debt and weak consumer demand.
Lower spending on discretionary items such as home improvement items, electronics and clothing has hurt sales at U.S. retailers over the past few years.
The Container Store said in a filing late Sunday that it expected to confirm a pre-planned restructuring plan within the next 35 days, adding that its website and 102 stores would remain open during the process.
The Coppell, Texas-based company reported $243 million in debt in the filing, up from about $173 million as of Sept. 30, 2023, according to the company’s second-quarter earnings report.
The company added that it has entered into transaction support agreements with approximately 90% of its creditors, providing approximately $40 million in new financing and $45 million in debt relief.
“While we execute our recapitalization and for many years to come, we intend to maintain a strong workforce and remain committed to delivering an exceptional experience for our customers,” said CEO Satish Malhotra.
Beyond Inc, formerly known as Overstock, agreed in October to invest $40 million in The Container Store, but weeks later said it had concerns about the retailer’s ability to reach a deal with lenders.
Last year, the online retailer acquired the brand name, intellectual property and e-commerce platform of home furnishings chain Bed Bath & Beyond for $21.5 million during bankruptcy proceedings.
Beyond did not immediately respond to Reuters’ request for comment.
Low-price home furnishings retailer Big Lot also said last week that it was preparing to close more than 900 stores and begin “going out of business” sales, months after filing for bankruptcy protection. (Reporting by Juveria Tabassum in Bengaluru; Editing by Krishna Chandra Eluri)
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