Tuesday Morning to Shut Half Its Stores, Including 20 in Southern California, in Bankruptcy Filing

Discount home goods retailer Tuesday Morning has filed for Chapter 11 bankruptcy and says it will close 263 underperforming stores, among them 20 in Southern California and 31 across the state.

The Southern California closures include locations in Glendora, Woodland Hills, Granada Hills, Torrance, La Verne, Lakewood, Santa Monica, Orange, Fountain Valley, Rancho Cucamonga, Riverside, Redlands and Palm Desert. Five stores in San Diego County and two in Ventura County are also on the list.

Nationally, the shutdowns amount to half of the chain's 487 stores in 40 states. According to CNN, a first round covering about 130 stores is set to start this summer. On Tuesday, Feb. 21, the company's website listed every closing location beneath an "Everything on sale" banner.

This is the Dallas-based retailer's second bankruptcy in three years. It pointed to the continuing effects of temporary store closures during the COVID-19 pandemic. CEO Steve Becker said the business had been performing well before the pandemic, but the closures and employee furloughs it forced had "severe consequences on our business."

"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," Becker said in a statement. He said the company has lined up $51.5 million in financing from Invictus Global Management to support operations during the proceedings.

Amit Patel, a partner at Invictus, said the firm looks forward to playing an important role in the reorganization. "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," he said.

Tuesday Morning intends to use the bankruptcy process to renegotiate a "significant number" of leases, and expects to have about 224 stores once it is finished. Company officials said the process will let the retailer concentrate on high-performing stores in vibrant markets. CNN reported that the chain has reopened around 80% of its stores in recent weeks and brought back 7,000 employees, with sales up 10% from the same period a year earlier.

The company's troubles follow those of other retailers. JCPenney, Neiman Marcus and J. Crew filed for bankruptcy protection in May, and Pier 1, which also sold home goods, filed in February. Bed Bath & Beyond is likewise closing stores as it prepares for bankruptcy.

Burt Flickinger III, managing director of retail consulting firm Strategic Resource Group, said Tuesday Morning's situation reflects an acceleration of the "retail ice age" that eliminated thousands of stores in the decade before COVID-19 as e-commerce grew. "Before COVID-19 about one in eight purchases in retail were done online," he said. "Now it's about one out of every five."

Flickinger also said inflation has left consumers stretched thin. "Over 70% of Californians and Americans are living paycheck to paycheck," he said, adding that stores like Tuesday Morning are "getting crushed through no fault of their own."