COPPELL, Texas — The Container Store Group, Inc. implemented a recapitalization transaction to "bolster its financial position, fuel growth initiatives, and drive enhanced long-term profitability." The company filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas on Dec. 22, 2024.

In a letter to its customers, Satish Malhotra, president & CEO of The Container Store, said the company has felt the impact of a challenging macroeconomic environment and is taking steps to continue serving its customers for years to come.

"With the support and partnership of our existing lenders, we intend to implement a transaction under Chapter 11 of the U.S. Bankruptcy Code to strengthen our balance sheet and protect our financial health for the long term. This process will allow us to emerge a stronger business, benefiting all of our stakeholders," Malhotra said. "What is important for you to know is that The Container Store is not going anywhere, and our stores and website remain open for business."

Throughout this Ch. 11 process, the company will operate its business as usual. Its stores and website will continue to operate as normal; all customer deposits and orders will be honored and delivered as normal. The Chapter 11 process does not include the Company’s Elfa business in Sweden, which continues to operate as usual.

At least 90% of the company’s term loan lenders have entered into a transaction support agreement, pledging their support for the in-court recapitalization which, among other things, will provide the Company"

• $40 million of new money financing, 
• at least $45 million of deleveraging, 
• substantial debt service relief, and 
• material maturity runway. 

In addition, the Company has modified its asset-backed lending facility to add $40 million in upsized capacity. According to the company, the recapitalization will substantially strengthen the company’s balance sheet and liquidity position to enable The Container Store to continue meeting its commitments to its partners, vendors, and stakeholders without disruption. Pursuant to the transaction support agreement, the company has negotiated and solicited support for a pre-packaged plan of reorganization and expects to confirm the plan of reorganization within the next 35 days.

“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 Malhotra. “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.”

The Company has filed a motion with the Bankruptcy Court that will allow it to make timely payments to vendors, suppliers, and other trade creditors in full under normal terms for goods and services delivered both before and after the filing. Therefore, outside of its Term Loan Lenders, the Company’s other creditors (including its vendor and trade partners) will be unimpaired as part of the transaction. The Container Store will emerge as a private company, under the ownership of its Term Loan Lenders, with a healthy financial profile primed to drive long-term growth.

The Container Store has created a dedicated website for stakeholders to get information about the Chapter 11 case at www.futureforcontainerstore.com.