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CNN
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The Container Store has filed for bankruptcy. It is the latest big-name retailer to fall victim to customers cutting back on consumer spending.

The 46-year-old company said in a statement late Sunday that filing for Chapter 11 bankruptcy protection will help it “strengthen its financial position, advance growth initiatives and increase long-term profitability.” The Container Store said in court documents that it has about $230 million in debt and just $11.8 million in cash, but will receive $40 million in new financing.

The chain’s 102 locations and website will remain open for orders during the process, which is expected to take 35 days.

“The Container Store is here to stay,” CEO Satish Malhotra said in a statement. “Our strategy is sound and we believe the steps we are taking today will allow us to further advance our business, deepen customer relationships, expand our reach and strengthen our capabilities.”

Payments to vendors and suppliers will be made as usual and all deposits and orders from customers will be honored and delivered, the company said. The Container Store plans to establish itself as a private company after completing the Chapter 11 process.

The company’s Sweden-based Elfa brand, described as a “premium customizable storage system,” is not affected by the bankruptcy.

The filing comes a few weeks after a deal with Beyond, the parent company of Bed Bath & Beyond and Overstock.com. The Container Store was supposed to offer Bed Bath & Beyond-branded products in some stores, but that deal appears to be in jeopardy. Beyond previously said the financing agreement was in question because the container store was having difficulty reaching an agreement with its lenders.

The container store’s shares have already been delisted from the New York Stock Exchange because they did not meet the exchange’s financial standards.

The Container Store’s difficulties show that the shock that many retailers have suffered from the pandemic is over and retailers are now facing a much more difficult environment. More stores are expected to close this year than any other year since 2020, according to Coresight Research. Chains like Party City, LL Flooring and Big Lots have filed for bankruptcy in recent months and plan to go out of business.

The retailer previously said in May that it was conducting a strategic review of its business to increase its value and suspended its financial guidance. Sales fell 10.5% in the most recent quarter ended Sept. 28, and the company lost $30.8 million during the quarter.

In addition to multiple quarterly losses, the company is vulnerable to changes in the real estate market. Mortgage rates reached a two-decade high of nearly 8% last year and are still hovering near 7%. High interest rates have discouraged many people from buying or selling their homes, and the frozen real estate market has also extended to the Container Store.

The retailer also faces competition from other companies with lower prices, such as Amazon, Walmart and HomeGoods. Analysts say holiday shopping likely won’t be strong enough to support the Container Store.

Moody’s Investors Service expects overall holiday sales to rise only 1% to 3%, a slowdown from last year. Home furnishings sales could be weaker, putting pressure on companies like Container Store and Wayfair, said Christina Boni, the company’s retail analyst.