It’s been a tough couple of weeks for U.S. retail’s homewares and decor sector as a spate of well known names closed down stores amid unsuccesful attempts to revive troubled brands.
And a common thread among many are the toxic tentacles of Bed Bath & Beyond, which lurched through its death throes only after persuading some investors to roll more good money in after bad.
A host of store closures are now imminent at Christmas Tree Shops, Tuesday Morning
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Despite hopes that it might only need to close 10 stores, Christmas Tree Shops has admitted defeat and is to liquidate its 72 remaining stores after failing to secure a buyer in time to meet lender demands.
Christmas Tree Shops — once owned by fellow bankrupt retailer Bed Bath & Beyond — first filed for bankruptcy back in May and had planned to reorganize its business with some selective store closures.
Instead, in court filings the retailer said that it had defaulted on its $45 million bankruptcy loan, with access to funding cut off on June 28. Lenders had pledged limited financing if the business was able to enter into an asset purchase agreement and secure a $5 million deposit.
Despite non-disclosure agreements with 29 companies over a possible acquisition, Christmas Tree Shops concluded it would not be able to meet the deadline.
As a result, the 1950s-era business, will now wind down its stores and going out of business sales have begun at the retailer’s stores across 20 states, according to a press release from Hilco Merchant Resources, which is running the liquidation.
Tuesday Morning Moves to Chapter 7
Meantime, while fellow retail struggler Tuesday Morning has continued to operate online, it has floated the improbable idea of returning to brick-and-mortar retail as the company said in a statement that it wasn’t ruling that out.
“Perhaps we should go back to our roots and open the first location in Dallas, where Tuesday Morning first began its journey,” the company speculated.
In reality, having initially looked to roughly halve the around 500 stores it operated at the start of the year, in a court filing June 30 it requested to shift from Chapter 11 to Chapter 7, running going out of business sales at all stores up to the end of June.
In February, Tuesday Morning had confirmed that it had “effectively eliminated” its operating liquidity in an early sign that the company would be unlikely to continue once it exited bankruptcy.
In the latest filing, the company also noted that the debtors have “sold substantially all of their assets.”
BuyBuy Baby Waves Goodbye
It was a similar story at BuyBuy Baby’s brick-and-mortar stores, with the retailer likely to go out of business after failing to find a buyer to continue operating the brand as a going concern. A planned auction was cancelled after it falied to attract bids.
BuyBuy Baby’s brand is likely to remain a going concern after New Jersey-based Dream On Me won the auction for the brand’s intellectual property, with a court hearing to approve the deal due on July 11.
The apparel, furniture and bedding retailer had about 120 locations and is part of parent company Bed Bath & Beyond, which filed for Chapter 11 in April before online retailer Overstock bought its intellectual property.
Overstock has paid $21.5 million for Bed Bath & Beyond’s IP and is rebranding its business to Bed Bath & Beyond in the U.S. and Canada to exploit its brand recognition CEO Jonathan Johnson said during a recent investors and analyst call.
Overstock has already rebranded its Canadian website and plans to launch the rebranding in the U.S. next month, operating solely under the Bed Bath & Beyond name within the next few months.
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