Christmas Tree Shops Files For Chapter 11 Bankruptcy
UPDATE, MAY 5, 4:50 P.M. ET: This story has been updated with more information and comments after Christmas Tree Shops officially announced it filed for Chapter 11 bankruptcy.
Home goods chain Christmas Tree Shops may be preparing to trim some branches from its portfolio of large retail stores.
The Massachusetts-based chain, with over 80 locations across 20 states, announced Friday it has filed a Chapter 11 bankruptcy petition. The Wall Street Journal first reported it was preparing to file for bankruptcy and has hired Boston-based law firm Murphy & King to prepare the Chapter 11 filing.
The chain's owner, Handil Holdings, said in a release it plans to continue operations during the bankruptcy process and aims to complete the financial restructuring and emerge as a "financially stronger retailer" before the end of August. It said it received a committment of up to $45M in debtor-in-possession financing from Eclipse Business Capital SPV LLC and ReStore Capital LLC to allow it to maintain business operations during the bankruptcy process. A court must approve the financing.
“After careful consideration we determined that availing ourselves of the Chapter 11 process was the best way to address our burdensome liabilities," CTS Chairman Marc Salkovitz said in a release. “This is strictly a financial restructuring. Our operations are sound. By increasing our financial flexibility, we will be able to focus on continuing to delight our loyal customers with a wide selection of unique goods at affordable prices.”
The chain has the most stores in Massachusetts with 15, followed by New York with 14, New Jersey with 10, Pennsylvania with seven and Florida with five, according to its website. Its stores range from 30K SF to 50K SF, meaning potential bankruptcy-related closures would leave big vacancies for its landlords to fill.
CTS opened its first store in the 1950s selling Christmas gifts and decorations in Cape Cod. In the 1970s, former owner Chuck Bilezikian bought the store and expanded it to include two other shops at the store.
In 2003, Bed Bath & Beyond bought the chain for $200M and helped to expand its presence to 19 other states. The company agreed to sell CTS and its distribution center to Handil Holdings for an undisclosed price in November 2020, the Boston Globe reported.
The new owner had previously signaled plans to open more than a dozen locations this year, Forbes reported last year.
Last month, Bed Bath & Beyond filed for bankruptcy and announced plans to close its 480 stores, a big blow to the retail sector.
