Wednesday, May 27, 2020

Tuesday Morning Files For Chapter 11 Bankruptcy, Plans to Close More than 100 Stores This Summer

Discount retailer Tuesday Morning filed for Chapter 11 bankruptcy protection Wednesday morning and is looking to shut more than 200 of its nearly 700 stores nationwide.   The Dallas-based company is seeking court approval to later this summer close at least 132 stores, which it says are either "underperforming" or located in areas where another Tuesday Morning store is nearby.  The company said it plans to close another 100 stores in a "second phase" of its reorganization efforts, leaving it with about 450 locations when it plans to exit Chapter 11 in early fall.
One of 8 stores in Georgia that will soon go dark permanently 
In Georgia, the initial list of store closures includes eight stores, four of which are in metro Atlanta.  The local closures include the stores at Brighten Park in Brookhaven, Georgetown Shopping Center in Dunwoody, The Village at Peachtree Corners in Peachtree Corners and Parkway Pointe near Vinings.  The Brookhaven, Vinings, Peachtree Corners, and Dunwoody locations were all relocations of existing stores.  The prior Dunwoody store was actually in the same center.   The other closures in Georgia will be in Canton, Columbus, Fayetteville and McDonough.  

The store closures planned for Peachtree Corners and Brookhaven are especially unfortunate for the owners of both centers in which the stores were located.   In Peachtree Corners, German grocer Lidl recently opened in place of a former EarthFare, while in Brookhaven, Lidl is expected later this summer to open in place of a former The Fresh Market.  

This past fall, Tuesday Morning closed locations in both Buckhead and Midtown, reportedly due to expiring leases versus the stores being underperforming.  That said, the company spent big when it moved stores in Brookhaven, Vinings and East Cobb to higher profile, more expensive spaces where sources tell ToNeTo Atlanta their return on investment was not always what they had hoped.  

Founded in 1974, Tuesday Morning early in its existence was only open for about half of the year.  Several years ago, the chain adopted more typical operating hours to better compete with brick and mortar rivals like HomeGoods and Pier 1 Imports.

For its part, TJX could emerge as a contender to absorb some of the empty Tuesday Morning spaces as it looks to expand its HomeGoods and newer Homesense stores.  An Fortune article Wednesday indicated that TJX is emerging from the pandemic better than rival Ross, and its HomeGoods and housewares merchandise are performing especially well.

Among the stores notably absent from the initial Tuesday Morning closure list are those on Montreal Road in Tucker and on Roswell Road in Sandy Springs.  The Tucker store is in a largely office/industrial complex, while the Sandy Springs store occupies a huge second generation retail space in a sad but recently updated center purchased in late 2018 by Jamestown.  Both stores represent the retailer's historic viewpoint that opening in subpar locations is OK if the stores can become destinations.  

The [planned] closures by Tuesday Morning add to a glut of retail real estate that is hitting the market amidst the coronavirus pandemic. The Covid-19 crisis forced many retailers like Tuesday Morning to close stores temporarily.  According to the Tuesday Morning website, "select locations are open again."  Tuesday Morning rival TJX Companies within the past week has reopened dozens of their TJMaxx, Marshalls and HomeGoods stores, as has rival Ross Dress For Less.   

Some retailers, however, are being forced to shut permanently.  J.C. Penney, which filed for bankruptcy earlier this month, is planning to close about 240 stores as part of its restructuring.  Pier 1 Imports, which had filed for bankruptcy in February and had already closed dozens of stores, is now planning to liquidate entirely after it could not find a buyer. L Brands is planning to close 250 of its Victoria’s Secret stores in 2020. 

A Tuesday Morning release essentially credited the pandemic with crippling the retailer saying in part:

"Immense impact of COVID-19 forced prolonged closure of entire store portfolio, Creating an insurmountable financial hurdle" but there were definitely other factors that played a part.  

Despite updating their logo and a light refresh of their interiors, Tuesday Morning has never measured up to HomeGoods or even newer TJX upstart brand Homesense in interior layout, design or product mix.  Additionally, the absence of either a store charge card or an ecommerce site (both offered by TJX) further constrained brand loyalty and patronage.  

There is no word yet on when liquidation sales at stores slated for imminent closure will commence.  

Are you surprised by Tuesday Morning's bankruptcy filing and reorganization plan? What is your preferred housewares retailer?  What would you like to see open in place of the soon to close Tuesday Morning stores in Georgia?

Please share your thoughts below.  


Anonymous said...

I love Tuesday Morning. One of my favorite stores. So glad the Tucker location is staying open. Sad to lose Brookhaven and Dunwoody. Shopped at all of those locations. Hope Tuesday Morning survives longterm.

Anonymous said...

I am not surprised. What group of people sat around at a meeting table and said, "I know a great name for our store..."TUESDAY MORNING"!

Anonymous said...

I'm also glad the Tucker location is staying open! I've enjoyed shopping there since had the open months/closed months, so a long time. I don't care so much about a store's presentation as I care about the functionality of the layout. It's a nice big store and a pleasure to spend some time there.

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