When I was living in teeny-tiny New York City apartments a decade ago, a trip to The Container Store was a special event—one that I considered a major step up from going to Bed Bath & Beyond with a stack of 20-percent off coupons. The storage bins came in all different colors, the Elfa shelves actually fit my space, and there was always something I didn't realize I "needed." A similar sentiment is likely what propelled the retailer in the early- to mid-2000s. Then came the pandemic, when everyone was home 24/7 and undertaking remodeling and reorganization projects. But times have changed, and The Container Store has felt it, leading the company to file for Chapter 11 Bankruptcy on Dec. 22.
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The Container Store fell on hard times post-pandemic.
In 2021, coming off the height of the COVID-19 pandemic, The Container Store reached $1 billion in net sales, and its stock climbed to $18 a share, according to the New York Post.
However, by this past September, the 46-year-old company had accrued $232 million in debt, up 34 percent from the same time in 2023.
In an earnings call on Oct. 29, The Container Store reported that its net sales were down 10.5 percent from the same time last year, while comparable store sales were down 12.5 percent. Total net losses were $16.1 million.
"We have faced challenges due to softening demand and increased price sensitivity affecting our financial performance," chief financial officer Jeff Miller said during the call.
However, as The Washington Post reported, "Earlier this month, the New York Stock Exchange suspended trading of the Container Store after its stock fell below requirements to maintain a market capitalization of $15 million for 30 consecutive days of trading."
"Its shares dropped Monday, trading around just 25 cents as investors reacted to the news. Its stock is down 99 percent year-to-date," the news outlet continued.
The Container Store files for bankruptcy.
On Dec. 22, The Container Store filed for Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, according to a press release.
At least 90 percent of the loan lenders have agreed to $40 million in new financing. Therefore, the company plans to "confirm a plan of reorganization" within 35 days and emerge from bankruptcy shortly thereafter.
The retailer's popular Sweden-based Elfa brand is not included in the bankruptcy.
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Will The Container Store close locations?
As of now, The Container Store has no plans to close any of its 102 locations in 34 states. The company has created a special website to assure customers that nothing will change during the bankruptcy, and it has also said there will be no layoffs.
"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, CEO and President of The Container Store. "We are particularly excited about the future of our custom space offerings, which continue to demonstrate strength."
However, according to Yahoo! Finance, sources told them that store closures could be possible in the future as "Chapter 11 allows companies to 'renegotiate the terms of their leases to align their store footprint with market realities and business needs.'" They added, "if they do not achieve meaningful rent reductions, they may be forced to close a select few locations."
Moreover, in an Oct. 30 filing with the U.S. Securities and Exchange Commission (SEC), The Container Store said there was "substantial doubt regarding the Company’s ability to continue" in light of a "persistently challenging retail environment, including reduced consumer spending in the storage and organization category and increased price sensitivity."
A partnership with Bed Bath & Beyond is likely off the table.
On Oct. 15, The Container Store announced a $40 million strategic partnership with Beyond, Inc., the parent company of Bed Bath & Beyond, Overstock, and Zulily.
The deal was set to help "The Container Store to return to profitable comparable store growth over time by utilizing and benefitting from Beyond’s intellectual property, customer data, network of brands, and affiliate relationships," a press release said.
However, Yahoo! Finance reports that sources say the deal has now fallen through due to the bankruptcy.
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Store closings are up significantly.
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The Container Store is not the only retailer struggling. Overall U.S. store closings are up 69 percent in 2024, according to data provided to Scripps News by Coresight.
Just last week, Party City announced it would close all of its roughly 800 stores after filing for bankruptcy in 2023.
On the same day, Big Lots announced that it was commencing going-out-of-business sales at its roughly 900 remaining locations after a previously planned asset sale fell through—and its future remains uncertain.
