(WJET/WFXP) -- The Container Store, one of the largest retailers of organizing solutions, has filed for Chapter 11 bankruptcy. It is the second major company to file for bankruptcy in the past week, following Party City, which filed early Saturday morning.
At the time of filing, The Container Store reported $243 million in debt, 100 million and 500 million in assets, and $11.8 million in cash. The company has secured $40 million in new financing and at least $45 million of deleveraging funds. For the second quarter of 2024, the company reported a loss in revenue of 10%, down to $196 million compared to the same period in 2023.
The Container Store joins the growing list of companies that have filed for bankruptcy this year, citing major macroeconomic challenges. These factors include reduced customer spending in the storage and organization category, increased price sensitivity, fewer home sales, a post-COVID economic slump, and increased competition.
"The Container Store is here to stay. 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," said Satish Malhotra, Chief Executive Officer and President of The Container Store.
Despite the financial challenges, the company's brick-and-mortar stores and online stores will continue their normal operations, with all orders and deposits being honored.
The bankruptcy filing will allow the company to make full payments to its debtors under normal terms for goods received before and after the filing. Once The Container Store successfully exits Chapter 11, it will emerge as a private company under the ownership of its loan lenders. This process does not affect the company's Elfa home goods business in Sweden.
Since its founding 45 years ago, the company has grown with 104 storefronts across 34 states complementing its online operations. The company celebrated its 100th store opening in 2023 and has added 4 additional stores since then.
This year has seen its fair share of companies filing for bankruptcy, with several shuttering all of their stores across the nation. Growing inflation, increased labor costs, and the aforementioned shift in customer spending have meant trouble for many businesses still trying to recoup or recover after the COVID-19 pandemic.