After almost 50 years in enterprise, The Container Retailer on Sunday filed beneath Chapter 11 within the U.S. Chapter Court docket for the Southern District of Texas and expects to verify a reorganization plan inside 35 days. The method doesn’t embrace its Swedish Elfa enterprise, in keeping with an organization press launch.
Simply days in the past, the New York Inventory Change suspended buying and selling of the corporate’s shares and initiated delisting proceedings. That transfer is now moot, as, as soon as its plan is executed, The Container Retailer will probably be owned by its time period mortgage lenders and function as a non-public firm. Within the meantime, the retailer will proceed to function as normal, with its shops and web site open for enterprise, per the discharge. The plan is to pay distributors and different commerce collectors in full, as outlined in a movement filed with the courtroom.
Forward of the submitting, the overwhelming majority of the retailer’s time period mortgage lenders agreed to a proscribing plan that may give the corporate $40 million in new financing, a minimum of $45 million in deleveraging, “substantial debt service reduction” and “materials maturity runway.” The corporate has added $40 million to its asset-backed lending facility.
The Container Retailer in October had floated the potential for chapter within the occasion {that a} pending strategic partnership with Past fell by way of. Past, which owns Mattress Tub & Past, Overstock and different manufacturers, had deliberate to speculate $40 million within the struggling house items retailer, however, weeks later, stated The Container Retailer’s incapability to succeed in an settlement with its lenders was jeopardizing the deal.
In a press release Sunday, Container Retailer President and CEO Satish Malhotra stated the brand new technique is sound, and thanked the corporate’s staff, clients, distributors and companions, who he stated “clearly see the robust potential in our enterprise.”
“We imagine the steps we’re taking at present will permit us to proceed to advance our enterprise, deepen buyer relationships, broaden our attain, and strengthen our capabilities,” he stated. “We’re notably enthusiastic about the way forward for our customized house choices, which proceed to exhibit energy.”
The Container Retailer has for months cited gentle demand because it continued to report falling gross sales. In its most up-to-date quarter, web gross sales in its retail phase fell 10.4% 12 months over 12 months to $186.8 million, as retailer comps plummeted 12.5% and on-line gross sales fell 13.7%. Nonetheless, web loss narrowed to $16.1 million, from $23.7 million the earlier 12 months.
