The Container Store files for bankruptcy, stores remain open

By ANNE D’INNOCENZIO, AP Retail Writer

NEW YORK (AP) — The Container Store has filed for bankruptcy as the storage and organizational goods retailer with roots dating back to the 1970s struggles with mounting losses and cash flow constraints.

The Texas company has faced increasing competition from retailers such as Target and Walmart, while demand for its goods has been under pressure in a tough real estate market where rising prices and increased mortgage rates have slowed sales.

Under Chapter 11 protection, The Container Store will continue to operate during the restructuring.

The company announced Sunday that it had filed for bankruptcy protection in Texas. The filing comes two weeks after the New York Stock Exchange suspended trading in the company’s shares. Container Store Group Inc. failed to maintain an average market capitalization of at least $15 million under NYSE rules.

Last month, The Container Store said it was in advanced discussions with lenders to provide additional capital to address declining profits and sales, according to a regulatory filing.

The company has struggled to raise cash, and last month a deal with the owners of Bed Bath & Beyond, Overstock and Zulily that would have included a $40 million cash injection fell through. The Container Store said in a regulatory filing that it did not believe it could meet the financing requirements of its partnership with Beyond Inc.

The Container Store was founded in 1978 by Garrett Boone, Kip Tindell and investor John Mullen, who opened the doors of The Container Store’s first location in Dallas, according to the company. Neither man, Boone with a master’s degree in history and Tindell, an English major, expected a career in retail. But both were driven by the idea of ​​creating a business entirely dedicated to storage.

The chain had its skeptics when Boon and Tindell opened its first 1,600-square-foot location. However, according to the company, the chain expanded to more than 100 stores ranging from 12,000 to 20,000 square feet.

In 1999, The Container Store purchased one of its suppliers, Elfa International. In 2021, the company acquired Closet Works in Chicago and shortly thereafter launched its premium wood line, Preston.

Last quarter, the company reported losses of $16 million and comparable store sales, a good indicator of a retailer’s health, fell 12.5%.