With COVID-19 shuttering its retail locations, Tuesday Morning Corp. is mulling a possible bankruptcy filing. The off-price home goods merchant has had discussions with lenders regarding a bankruptcy loan, but no formal decisions have been reached, Bloomberg reported, citing unnamed sources.
The sources cited in the report noted that plans were not set in stone, and that the firm remains in search of alternative methods of financing. The result may hinge on the forecast of when retail locations could reopen, as well as other market factors.
The firm would reportedly be able to reduce its borrowings, shutter shops that have not shown strong performance and steer clear of a permanent shutdown with a Chapter 11 filing.
Bloomberg noted that a representative for the retailer would not provide a comment.
Tuesday Morning had shuttered its retail locations for a time as of March, and reportedly does not have an eCommerce site. As a precautionary step to weather the health crisis, the retailer drew $55 million from its revolving credit facility.
The discount retailer, which was launched in 1974, focuses on home merchandise, furnishings, textiles and other types of home goods. Tuesday Morning has approximately 700 shops in 39 states.
In separate news, J.Crew Group Inc. had become the first major merchant to file for bankruptcy, with plans to cede control of the firm to lenders, per news on Monday (May 4). J. Crew had made its filing in federal court with an arrangement to expunge debt of $1.65 billion in exchange for providing ownership to those to whom the funds are owed.
The virus' outbreak forced the merchant to close its almost 500 J. Crew, J. Crew Factory and Madewell shops for a time. J.Crew plans to permanently close an as of yet undetermined number of retail stores.