Two additional retailers filed for bankruptcy last week.
Tuesday Morning, a Dallas-based discount home-goods retailer with 687 stores in 39 states, filed for Chapter 11 bankruptcy protection on 27 May.
The stores were shuttered by the economic shutdown but about 80 percent have now reopened and are showing sales roughly 10 percent higher than a year previous, the company reported.
Still, the two-month shutdown did damage “that can be effectively addressed only through a reorganization in Chapter 11,” said CEO Steve Becker.
Tuesday Morning averaged about $1 billion in sales in recent years, but sales have been hampered by the company’s lack of an Internet presence and also by merchandise described by one analyst as a “jumbled flea market of whatever buyers could seemingly get their hands on.”
The company plans to emerge from bankruptcy with about 450 stores, permanently closing about 230.
Tuesday Morning’s creditors have advanced the company $100 million to keep it operating through bankruptcy; the company has asked them for $25 million in additional capital.
Tuesday Morning was joined in bankruptcy by the U.S. division of Belgian baker Le Pain Quotidien, which operates 98 upscale fast-food restaurants.
The company was poorly equipped to quickly transition to online and take-out sales when lockdown mandates were issued. In addition, most of the outlets are in New York City, where competition is especially intense among eateries.
Instead of shutting down the entire chain, Le Pain Quotidien hopes to sell its U.S. operation to competitor Aurify Brands for $3 million. The sale would enable 35 restaurants to reopen and rehire some laid-off employees.
Le Pain Quotidien’s U.S. division is one of several restaurant chains to go bust, including Craftworks Holdings, which operated Logan’s Roadhouse and other chains. Krystal, the southern U.S. burger chain, has sold itself out of bankruptcy to the Fortress Investment Group, one of its lenders, which also has bought Craftworks.
Bamboo Sushi, Bravo, Brio, and Quickfish are among other restaurant chains seeking buyers.
Retailers J. Crew Group, J.C. Penney, Neiman Marcus, Pier 1, Hertz Corp. and now the Advantage car rental company also have declared bankruptcy since the economic shutdown took hold.
TREND FORECAST: There will be no retail recovery. Many major, debt-loaded retailers were in decline prior to the government mandated lockdowns that have now driven them into bankruptcy or put them out of business.
While there will be no rush to the already declining malls, there will be retail upticks in mid to high end retail sectors in more upscale towns and villages.
