Home goods retailer The Container Store files for bankruptcy protection

Dec 23 (Reuters) – Custom closets manufacturer The Container Store filed for Chapter 11 bankruptcy protection in the United States, as the retailer struggles with mounting debt and weak consumer demand.

Muted spending on non-essential items such as home improvement goods, electronics and apparel has hit sales at retailers in the U.S. over the past couple of years.

The Container Store expects to confirm a pre-packaged plan of reorganization within the next 35 days, it said in a filing late on Sunday, adding that its website and 102 stores will remain open during the process.

The Coppell, Texas-based company reported $243 million in debt in the filing, up from about $173 million as of Sept. 30, 2023, according to the company’s second-quarter earnings report.

It had entered into a transaction support agreement with about 90% of its creditors to provide about $40 million in new financing and $45 million in debt reduction, the company added.

“We intend to maintain our strong workforce and remain committed to delivering an exceptional experience for our customers while we execute this recapitalization and for many years to come,” said chief executive officer Satish Malhotra.

Beyond Inc, formerly Overstock, had agreed to invest $40 million in The Container Store in October, but a few weeks later said it had concerns over the retailer’s ability to reach an agreement with its lenders.

The online retailer had purchased home goods chain Bed Bath & Beyond’s brand name, intellectual property and ecommerce platform during its bankruptcy proceedings for $21.5 mln last year.

Beyond did not immediately respond to a Reuters request for comment.

Off-price home goods retailer Big Lots also said last week it was preparing to close its over 900 locations and begin a “going out of business” sale months after it filed for bankruptcy protection. (Reporting by Juveria Tabassum in Bengaluru; Editing by Krishna Chandra Eluri)