Christmas Tree Shops to Liquidate All Stores
Lenders terminate loan funding the retailer’s bankruptcy after the company breached terms due to worsening sales, liquidity A Christmas Tree Shops store in Hagerstown, Md. The retailer took out a $45 million bankruptcy loan, including roughly $20 million in fresh capital, from its lenders. Photo: Kristoffer Tripplaar/Sipa/Associated Press By Akiko Matsuda June 30, 2023 8:22 am ET | WSJ Pro Discount home-goods retailer Christmas Tree Shops is headed for liquidation after defaulting on a loan that funds its bankruptcy. The 82-store chain filed for bankruptcy in May with plans to close a small number of underperforming stores and to exit chapter 11 by August. The plan was to restructure the company’s finances while keeping its ownership intact.
A Christmas Tree Shops store in Hagerstown, Md. The retailer took out a $45 million bankruptcy loan, including roughly $20 million in fresh capital, from its lenders.
Photo: Kristoffer Tripplaar/Sipa/Associated Press
Discount home-goods retailer Christmas Tree Shops is headed for liquidation after defaulting on a loan that funds its bankruptcy.
The 82-store chain filed for bankruptcy in May with plans to close a small number of underperforming stores and to exit chapter 11 by August. The plan was to restructure the company’s finances while keeping its ownership intact.
The retailer took out a $45 million bankruptcy loan, including roughly $20 million in fresh capital, from its lenders. But the creditors terminated the loan after the company defaulted on the terms due to worsening revenues and liquidity, according to a notice filed with the U.S. Bankruptcy Court in Wilmington, Del. late Thursday.
The company and its stakeholders have reached an agreement this week to liquidate the remaining roughly 70 stores unless a buyer emerges within the next week or so, according to the filing.
“Unfortunately, circumstances have resulted in the plan really not being able to go forward because quite simply, the debtor doesn’t have the time nor the money to go forward with the plan,” said Harold Murphy, a lawyer for the retailer, during a Thursday court hearing.
The retailer will no longer present a plan to exit bankruptcy because of the change of course, said Murphy.
Troubles started about a month ago when the retailer’s sales in the formerly performing stores started to decline because it was unable to replenish store shelves fast enough, Murphy said. Customers ended up buying fewer items as a result, he added.
The Middleboro, Mass.-based Christmas Tree Shops was among a dozen retailers that filed for bankruptcy in the first half of this year.
Its owners, Marc and Pam Salkovitz, acquired the retail chain from Bed Bath & Beyond
in 2020. Retail earnings have broadly fallen since earlier this year as consumers cut back spending on discretionary items to cover the rising costs for essential items such as food, gas and housing because of inflation.Bankrupt retailers often end up in liquidation. Housewares chain Tuesday Morning recently said it would liquidate all of its stores in bankruptcy.
Write to Akiko Matsuda at [email protected]
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