• by Sarah Mahoney  @mahoney_sarah, December 23, 2024

With declining sales and mounting losses, the Container Store has filed for Chapter 11 but plans to keep stores open as it reorganizes through bankruptcy.

Wrestling with $243.1 million in debt, the retailer has gotten the commitment for $40 million in new money and support from at least 90% of lenders. The retailer expects to emerge from the reorganization within 35 days.

“The Container Store is here to stay,” says Satish Malhotra, CEO and president, in the bankruptcy announcement. “Our strategy is sound, and we believe the steps we are taking today will allow us to continue to advance our business, deepen customer relationships, expand our reach, and strengthen our capabilities.”

The 46-year-old retailer, based in Coppell, Texas, has 100 stores and, in October, announced a strategic partnership with Beyond, owner of Bed Bath & Beyond, Overstock, Zulily, and other online retail brands. That deal fell apart last month, leaving it with few options. As the Container Store’s stock continued to weaken, the New York Stock Exchange delisted it earlier this month.

The Container Store has been trying to shore up flagging revenue by focusing more on custom spaces, which allow people to configure their own closet and storage solutions -- a tactic that Malhotra says “continue to demonstrate strength.”

Those include the Container Store’s Elfa custom space business in Sweden, which is not included in the Chapter 11 process.

In October, the Container Store announced that second-quarter revenue fell 10.5% to $196.6 million. (That included a 12.9% decline in sales at the Elfa division.) Comparable store sales decreased 12.5%. The company’s net loss came in at $16.1 million, compared with $23.7 million in the second quarter of fiscal 2023.