The Container Store Files for Chapter 11 Bankruptcy, Plans to Keep 102 Stores Open Across 34 States

Dec 23, 2024, 12:10 PM

The Container Store Group Inc. has filed for Chapter 11 bankruptcy protection in a Southern District of Texas court, aiming to address mounting losses and a substantial debt load. The company, which operates 102 stores across 34 states, reported about $230 million in debt and $11.8 million in cash on hand, with total liabilities of $836.4 million against $969 million in total assets. The filing comes amid a weaker housing market and increased competition from cheaper alternatives, which have contributed to declining sales and quarterly losses, including a 23% plunge over the past two fiscal years. The Container Store was delisted from the New York Stock Exchange after falling below the required market cap. The company plans to execute a comprehensive recapitalization transaction with lender support, expecting to receive $40 million in new financing. The reorganization process is anticipated to take 35 days, during which all stores will remain open, and customer deposits and orders will be honored. There are no planned layoffs or store closures. The company aims to emerge as a private entity, with new lenders becoming the owners of the business. CEO Satish Malhotra stated that the strategy is sound and the steps taken will allow the company to advance its business, deepen customer relationships, expand its reach, and strengthen its capabilities.