Tuesday Morning emerges from bankruptcy proceedings

Tuesday Morning Exits Chapter 11 Bankruptcy with $150 Million in Financing

Tuesday Morning, the off-price retailer that pioneered the modern off-price model in the 1970s, has successfully emerged from Chapter 11 bankruptcy protection. The company, founded by Lloyd Ross, has secured a $110 million lending facility from J.P. Morgan, Wells Fargo, and Bank of America, along with a new debt financing of undisclosed amount, and a planned rights offering for shareholders worth $40 million.

The retailer has been struggling in recent years, with operating losses nearly doubling and sales remaining 28% down from 2019 levels for the period ending Sept. 30. The pandemic resulted in the near-total collapse of Tuesday Morning's revenue. Despite these challenges, the company opted to go forward on its own after considering a potential sale in bankruptcy.

Tuesday Morning's CEO, Steve Becker, framed the Chapter 11 exit as an opportunity for long-term growth. "We are excited to emerge from Chapter 11 and begin this new chapter in our company's history," he said. "We are grateful to our lenders, investors, and other stakeholders for their support and confidence in our vision for the future."

The investment firm Brigade Capital Management participated in Tuesday Morning's financing plan to enable the exit from Chapter 11 bankruptcy. The company's stores, described as a "jumbled flea market" by GlobalData analysts, are now mainly located in Texas, Florida, California, Virginia, Georgia, and North Carolina.

Tuesday Morning's journey began in the mid-1970s when it opened its first permanent store. By 2018, the company made $1 billion in sales and ran 700 locations. However, the company's fortunes began to decline, and it filed for bankruptcy in 2020. Since then, it has reduced its store count from 687 to 490.

In an effort to reduce its inventory, Tuesday Morning filled a Dallas warehouse with leftover inventory from brands and retailers and invited the public to shop its discount prices. Despite these efforts, net cash flow remained negative through October and November, according to operating reports filed in bankruptcy court.

As Tuesday Morning moves forward, it will aim to regain its position as a leading off-price retailer. With the support of its lenders, investors, and stakeholders, the company is optimistic about its future. "We are committed to delivering value to our customers, employees, and shareholders," said Becker. "We are confident that our new financing will provide us with the resources we need to achieve our goals."