The Container Store Files for Bankruptcy but Customers Probably Won’t Notice

With about $230 million in debt and $11.8 million in cash, The Container Store has filed for bankruptcy. The 46-year-old home goods retailer has been flailing with some tough times and even tougher competition.

The bankruptcy filing of The Container Store may save the company from going out of business entirely. Chapter 11 protection will help the retailer reorganize and improve its financials while implementing strategies for long-term growth and profitability.   

“The Container Store is here to stay,” said CEO Satish Malhotra, per CNN. “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.”

With the majority of the retailer’s lenders supporting the bankruptcy initiative, The Container Store will get some relief from debt payments along with an extension to pay off other liabilities. Even under Chapter 11 protection, the company also expects to receive $40 million in new financing.

During The Container Store’s bankruptcy process, which will likely take just over a month, all 102 locations and its website will be open for purchases. Vendor and supplier payments will be made as usual, and customer orders will be completed “without disruption,” as reported by FOX Business. The company also committed to keeping its current workforce.

The Container Store Has Been Struggling

The Container Store has been bleeding money for several consecutive quarters. Just in the last quarter, which ended Sept. 28, the retailer reported a sales decline of 10.5% and $30.8 million in losses.

The dismal financial figures were blamed on changes in the housing market as high mortgage rates deterred the buying and selling of homes. With real estate sales down, consumers didn’t shop for home goods as much as they would have in an up market.

Rival retailers Walmart, Amazon, and HomeGoods have made it especially difficult for The Container Store to effectively compete against their lower-priced products. Plus, Container Store products are often considered non-essential by consumers, who have been delaying or foregoing such purchases.

The Container Store’s Chapter 11 filing comes nearly two months after Beyond Inc., the parent company of Bed Bath & Beyond, announced a plan to invest $40 million into the company. Beyond planned to rejuvenate the Bed Bath & Beyond brand by bringing various products back to physical stores. Now, however, that plan may have been upended.