THE Container Store has exited bankruptcy and laid out plans for the New Year.
While the home goods retailer will continue operations, consumers will see some changes.
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After weeks of rumors and sales struggles, The Container Store filed for Chapter 11 bankruptcy in December, attempting to clear debts of over $240 million.
It cited losses of about $10 million at the end of September, with overall revenue taking a 10.5% dip compared to the same period in 2023.
CEO Satish Malhotra, former Chief Retail Officer and Chief Operating Officer at Sephora Americas, noted that the company would undergo a re-organization process.
No store closures were noted at the time of the filing, and Malhotra said no employees would be laid off amid the bankruptcy proceedings.
Read More on Bankruptcies
He issued a defiant message at the time, telling investors and customers that The Container Store would be “here to stay” despite the bankruptcy filing.
“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 CEO noted in December.
On January 28, 2025, The Container Store officially exited bankruptcy, per a press release.
While the promise of no job losses has remained accurate, The Container Store will close two stores in 2025.
The company noted that the closures were separate from the bankruptcy filing.
Specific locations for the shuttering stores have yet to be confirmed.
The U.S. Sun has contacted The Container Store for more information.
FUTURE IN MIND
Exiting bankruptcy, the company received $40 million in additional financing and has implemented its Plan of Reorganization.
It additionally obtained another $40 million in “upsized capacity” after “modifying its asset-backed lending facility,” per the release.
The Container Store also confirmed that it will now be a private company through ownership under several lenders.
How does bankruptcy work?
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Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
Malhotra said he was confident that The Container Store’s restructuring process made way for a “healthier balance sheet” and “profitable growth” in 2025 and beyond.
“With our restructuring process now behind us, we have renewed energy and excitement to deliver for our customers,” Malhotra said in a statement.
“We are focused on optimizing our business, enhancing our portfolio of organizing solutions and services, and continuously improving the customer experience, I am grateful to our employees and vendor partners for their dedication throughout this process, to our valued customers for their support, and to our new owners for their belief in our business.”
DIRECT IMPACT
At the time of the filing in December, financial experts suspected that higher interest and mortgage rates in the United States had a significant impact on The Container Store.
Neil Saunders, an analyst at GlobalData Retail, noted that with fewer people moving due to higher costs, storage items weren’t needed as much.
“When people move, they buy a heck of a lot of things related to storage and organization,” he told CNN in an interview.
“Without this impetus, [The] Container Store has struggled.”
As of January 2025, the average 30-year fixed mortgage rate for Americans is 6.875%, per US Bank.
The Container Store isn’t alone in its bankruptcy struggles.
Party City, which filed for bankruptcy a second time over a few years, confirmed it would close all of its remaining stores only days before The Container Store in December.
Big Lots is also closing over 700 locations as it exits bankruptcy.