Tuesday Morning Corp. landed a $35 million financing deal from the company that controls Pier 1 Imports, which will strengthen the discount housewares retailer’s balance sheet.
Dallas-based Tuesday Morning said Friday that as part of the funding deal led by Retail Ecommerce Ventures LLC, the discount retailer will expand its catalog to include merchandise from Pier 1 Imports.
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Tuesday Morning management, including chief executive Fred Hand, will participate in the funding by buying $3 million worth of junior notes, while Retail Ecommerce and Ayon Capital LLC, a family office focused on healthcare and technology investments , will purchase $32 million in convertible notes.
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The debt deal will result in a change of control, with Retail Ecommerce and Ayon appointing the majority of Tuesday Morning’s board. The Dallas chain was among a handful of retailers that filed for bankruptcy in 2020 after the government ordered stores closed at the start of the coronavirus pandemic.
Retail Ecommerce, a Miami Beach, Fla.-based brand licensing company founded by serial entrepreneurs Alex Mehr and Taino Lopez, has amassed bankrupt or struggling consumer brands in recent years, including Pier 1 Imports, Modell’s Sporting Goods and Dressbarn.
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In May, Tuesday Morning reported a net loss of $18.2 million for the third fiscal quarter ended April 2, compared to a net loss of $37.1 million the previous year. The company said it expects fiscal fourth-quarter same-store sales to decline 3% to 5% from a year earlier. For the full year, the retailer expects an adjusted loss of $26 million to $29 million before interest, taxes, depreciation and amortization.
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Tuesday Morning’s stock slid to 21 cents a share from more than $2 a share at the start of the year.