The Container Store filed for Chapter 11 bankruptcy protection with a lender-backed plan for emerging as a private company, signaling the end of a proposed investment in The Container Store by Beyond, Inc.
A source close to the matter told HomePage News The Container Store “has been working closely with its lenders to determine a path forward that addressed its balance sheet. While they explored a strategic partnership with Beyond, Inc., the deal did not materialize.”
The filing occurred in the United States Bankruptcy Court for the Southern District of Texas on December 22. The Container Store stated it implemented a recapitalization transaction tied to the bankruptcy filing set to bolster the company’s financial position, fuel growth initiatives and drive enhanced long-term profitability. At least 90% of the company’s term loan lenders have entered into a transaction support agreement, pledging to back the in-court recapitalization, The Container Store maintained. As part of that initiative, the company gains $40 million of new money financing, at least $45 million of deleveraging, substantial although not specified debt service relief and a material maturity runway.
In an additional benefit, The Container Store has modified its asset-backed lending facility to add $40 million in upsized capacity. The recapitalization will strengthen the company’s balance sheet and liquidity position, which will enable The Container Store to continue meeting its commitments to partners, vendors and stakeholders without disruption, the company asserted.
The Container Store has negotiated and solicited support for a prepackaged plan of reorganization and expects to confirm the plan within the next 35 days, the company noted. Throughout the bankruptcy process, The Container Stores intends to operate its business as usual. The Container Store brick-and-mortar locations and website will continue to operate as normal, the company pointed out, and the company will honor all customer deposits and deliver all orders as it normally has.
Beyond, Inc., owner and operator of such brands as Bed Bath & Beyond, Overstock and Zulily, on October 15, 2024, announced it agreed to invest $40 million in The Container Store through a preferred equity transaction subject to terms and conditions that include an amendment or refinancing of The Container Store’s credit facilities as acceptable to Beyond. Beyond did not immediately respond to a HomePage News request for comment on The Container Store new plans.
“The Container Store is here to stay,” said Satish Malhotra, The Container Store president and CEO, in announcing 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. We are particularly excited about the future of our custom space offerings, which continue to demonstrate strength. I want to thank our incredibly talented employees for their continued dedication, our customers, partners and vendors for their support, and our lenders who clearly see the strong potential in our business. We intend to maintain our strong workforce and remain committed to delivering an exceptional experience for our customers while we execute this recapitalization and for many years to come.”
