Discount retailer Tuesday Morning filed for Chapter 11 bankruptcy protection on Wednesday and will shut down about 230 stores across the United States, following similar filings from other nationwide retailers during the CCP virus pandemic.
The Dallas-based company joins a growing list of companies that have gone bankrupt during the outbreak, including JCPenney, Stage Stores, J.Crew, and Neiman Marcus. Other retailers such as Victoria’s Secret and Bath & Body Works have been forced to shut down locations.
“The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” Tuesday Morning CEO Steve Becker said in a statement.
He added: “Prior to the pandemic, we were gaining momentum in our merchant organization, growing our vendor base and improving brands, assortment and value for our customers, while investing in our technology and corporate leadership team. However, 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.”
The firm said in a press release it is planning to emerge from Chapter 11 in early fall 2020.
“We plan to emerge from Chapter 11 in a stronger position as a leading home goods off-price retailer, providing unmatched value to our customers. The commitment from our lenders to provide access to significant capital demonstrates faith in our value-driven business model and iconic brand. Looking ahead, we’ve been encouraged by very positive performance of the business as we continue to re-open our doors and welcome back our dedicated customers,” Becker said.
In addition, the company said it secured $100 million from its lenders to help it through bankruptcy.
Amid the CCP (Chinese Communist Party) virus crisis, the firm said it re-opened about 80 percent of its stores, allowing 7,300 employees to return to work.
More retail bankruptcies are expected to be on the way as a number of businesses’ sales have plummeted during the outbreak after stores were forced to shutter and people remaining at home.
Last week, a court ruled that JCPenney can keep paying staff and vendors after it filed for Chapter 11 bankruptcy on May 15.
“You said it’s fast, but fair. I want you to know that at least my looking at it says it’s not fast enough,” Jones said of JCPenney’s plan. “I am very worried about this. It’s why I’m having a hearing on a Saturday,” he said, adding that the company can use $500 million of its cash on hand, Reuters reported.