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UPDATE, MAY 27, 11:30 A.M. ET: The story has been updated to reflect Tuesday Morning's Chapter 11 filing Wednesday morning.
Tuesday Morning officially filed for Chapter 11 bankruptcy reorganization on Wednesday, saying financial difficulties from the coronavirus pandemic forced the home goods retailer to close all of its stores for a prolonged period of time, pushing it into bankruptcy.
The Dallas-based retailer filed its petition with the United States Bankruptcy Court for the Northern District of Texas. At the time of its filing, the store had reopened 80% of its stores and brought back more than 7,300 of its associates. The Chapter 11 bankruptcy reorganization process allows the retailer an opportunity to shed debt and other liabilities weighing it down while remaining open with the intent to restructure as a stronger company.
Tuesday Morning received $100M in debtor-in-possession financing to help keep its operations going and is required to locate another $25M in financing on its own, which the company is working on now.
The Wall Street Journal first reported the bankruptcy was in the works Tuesday.
The retailer, which has roughly 687 stores nationwide, closed all of them in late March and drew upon a $55M credit facility as the coronavirus pandemic hit, according to public corporate statements.
Tuesday Morning's filing follows on the heels of JCPenney Co. filing for Chapter 11 bankruptcy earlier this month. It has been a busy few months of retailers going bankrupt. Neiman Marcus, Stage Stores, Pier 1 and J. Crew are among the large companies to declare Chapter 11 this year, as long-standing trends hurting physical retailers and coronavirus-related shutdowns slammed revenues. At least 14 retailers and restaurant groups had declared bankruptcy in 2020 as of mid-May, Business Insider reports. Some of them are attempting to leverage a little-used section of the bankruptcy code to get a reprieve from paying rent while they go through proceedings.
Tuesday Morning declined to comment to Bisnow.
Trepp Analytics noted in a report that the retailer may be hoping to sell itself out of bankruptcy after missing a payment owed this week. Trepp also reported a large pool of CMBS loans are backed by shopping centers or retail outlets with Tuesday Morning as a tenant.
"An example is the $46.5M Redlands Town Center loan which makes up 4.88% of GSMS 2017-GS6. That deal is part of CMBX 11," Trepp Analytics reported.
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