The Container Store, a storage and organization goods retailer, has applied for bankruptcy protection while it reorganizes its finances. The Texas company is grappling with mounting losses and cash flow shortages, the AP reports. The chain has faced increasing competition from retailers like Target and Walmart at the same time that demand for its goods is under strain in a rough housing market, where soaring prices and elevated mortgage rates have stunted sales. Under Chapter 11 protection, the chain will continue to operate while it restructures.
The chain, founded in 1978, has more than 100 stores nationwide, NBC New York reports. The filing arrives two weeks after the trading of company shares was suspended by the New York Stock Exchange. The Container Store Group Inc. failed to maintain an average market capitalization of at least $15 million in accordance with NYSE rules. Last month, the company said it was in advanced discussions with lenders to provide additional capital as it aimed to turn around sagging earnings and sales, according to a regulatory filing.
The company has been struggling to raise cash. Last month an agreement with the owner of Bed Bath & Beyond, Overstock, and Zulily that would have come with a $40 million cash infusion fell apart. In a news release, the company said its "stores and website will continue to operate as normal; all customer deposits and orders will be honored and delivered as normal," and vendors will be paid in full. "The Container Store is here to stay," company president and CEO Satish Malhotra, said in a statement. The bankruptcy filing doesn't cover the company's Sweden-based Elfa brand, which it describes as a "premium customizable storage system," CNN reports. (More retailers stories.)
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