Container Store Among String of Retailers Filing for Bankruptcy, Closing Stores

The year of bad news for retailers in the U.S. got even worse as more stores have filed for bankruptcy or closed their doors this week.

The Container Store filed for bankruptcy, while both Party City and Big Lots announced they were shuttering all their stores.

Container Store filed for Chapter 11 bankruptcy protection Sunday after months of financial issues, including a net loss of more than $16 million during the third quarter and nearly $230 million in long-term debt, Axios reported.

However, the retail chain will have some help from a group of lenders, which are providing $40 million in new financing and debt service relief, according to the company’s announcement.

“The Container Store is here to stay,” Container Store CEO Satish Malhotra said in a statement. “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.”

Throughout the bankruptcy process, the company said it will continue to operate its stores and website as usual. Container Store sells boxes, containers, shelving, storage systems and office supplies, along with kitchen, bath and travel products. 

But not every retailer is here to stay.

Party supply retail chain Party City announced this week it would shut down all its stores after filing for bankruptcy for the second time in less than two years due to nearly $162 million in debt in company loans, Bloomberg reported.

Store closing sales have already started, as Party City’s lenders “considered it essential to commence store closing sales before the Christmas and New Year’s selling season to maximize the proceeds of such sales for the benefit of all stakeholders,” Deborah Rieger-Paganis, chief restructuring officer at Party City, told Bloomberg.

Meanwhile, discount retailer Big Lots has started “going out of business sales” this week at all of its 963 remaining locations, CNN reported.

The furniture and home goods seller initially filed for bankruptcy in September after announcing an agreement to sell its business to equity firm Nexus Capital Management for $620 million, as Commercial Observer previously reported.

While the deal was expected to close during the fourth quarter, Big Lots said in a statement last week that it “does not anticipate completing” the transaction, CNN reported.

The company said it plans to negotiate with Nexus and other potential buyers and aims to complete a sale by early January, according to the outlet.

Meanwhile, Big Lots plans to lay off 555 of its corporate staff in Columbus, Ohio — including its CEO — as it winds down operations.

Spokespeople for Container Store, Party City and Big Lots did not immediately respond to requests for comment.

The news comes after a tough year for retailers across the country. As of early November, a total of 6,481 stores closed this year, including outposts of several popular home goods, fitness and drugstore chains, CO reported.

That includes flooring retailer LL Flooring, which officially shut down its business in September; Walgreens, which announced it’s shrinking its U.S. footprint by about 1,200 stores; and Blink Fitness, which was recently sold in a bidding war to U.K.-based gym operator PureGym.

Isabelle Durso can be reached at idurso@commercialobserver.com.