On February 14, 2023 Tuesday Morning, Inc. and affiliates filed for chapter 11 protection in the Northern District of Texas (Case No. 23-90000). The Petition states funds will be available to Unsecured Creditors.
Julian Preston Vasek
Munsch Hardt Kopf & Harr P.C.
DALLAS--(BUSINESS WIRE)-- Tuesday Morning Corp. (OTC: TUEM) (“Tuesday Morning” or the “Company”), a leading off-price retailer of home goods and décor, today announced that it is pursuing a financial and operational reorganization to enable the Company to reduce its outstanding liabilities, obtain significant and necessary capital, and ultimately transform into a nimbler retailer that serves heritage markets in a profitable manner. To pursue its reorganization, Tuesday Morning has filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division (the “Bankruptcy Court”). The Company has also obtained a commitment from Invictus Global Management, LLC (together with its affiliates, “Invictus”) to provide $51.5 million of debtor-in-possession (“DIP”) financing to support ongoing operations during the proceedings. The DIP financing is subject to approval of the Bankruptcy Court.
Andrew Berger, Chief Executive Officer and Director, commented:
“After considering how best to address Tuesday Morning’s exceedingly burdensome debt, we have determined that the best path to reorganizing and transforming the Company begins with a Chapter 11 filing. Fortunately, we have the support of a committed capital provider in Invictus and a clear vision for transforming into a focused retailer that serves its core, heritage markets in a profitable manner. We look forward to taking steps that enable us to emerge as a stronger retailer that draws on a legacy of offering a unique off-price value proposition to our loyal customer base. We appreciate all the support of our employees, customers, creditors and other partners as we seek to sustain commercial operations with minimal disruptions.”
Amit Patel, Partner of Invictus, added:
“We look forward to playing an important role in reorganizing and transforming Tuesday Morning. As a Texas-based investment firm with strong roots in the state, we have long admired Tuesday Morning’s strong connection to customers seeking unique home goods at competitive prices. Andrew and his leadership team have our full support as they guide the Company through this process and lay a foundation for a brighter future.”
Optimization of Store Fleet and Distribution Footprint
During the restructuring process, Tuesday Morning plans to focus on optimizing its store footprint and focusing on its core and heritage markets. The Company intends to close stores in low-traffic regions while allocating the proper resources to remaining stores in high-traffic regions. The Company believes this targeted approach to winding down unprofitable and underperforming stores will position Tuesday Morning to emerge from bankruptcy with a profitable, cash-generating store fleet that serves its most engaged and loyal customers.
In addition, Tuesday Morning plans to realize significant cost reductions and new efficiencies across its distribution channels as a result of focusing on a narrower set of high-performing stores. The Company expects to pivot to a third-party logistics, or 3PL, model and transition to a more cost-effective inventory acquisition strategy for remaining stores.
Court filings and other documents related to the court-supervised process are available at https://cases.stretto.com/TuesdayMorning or by calling the Company’s claims agent, Stretto, at (855) 202-8673 or by sending an email to TuesdayMorningInquiries@stretto.com.
Munsch Hardt Kopf & Harr, P.C. is serving as the Company’s legal advisor, and Vinson & Elkins LLP is serving as legal advisor to Tuesday Morning’s Special Committee. Piper Sandler is serving as financial advisor to the Company.
ABOUT TUESDAY MORNING
Tuesday Morning Corporation is one of the original off-price retailers specializing in name-brand, high-quality products for the home, including upscale home textiles, home furnishings, housewares, gourmet food, toys and seasonal décor, at prices generally below those found in boutique, specialty and department stores, catalogs and on-line retailers. Based in Dallas, Texas, the Company opened its first store in 1974 and currently operates 487 stores in 40 states. More information and a list of store locations may be found on the Company's website at www.tuesdaymorning.com.