The Container Store filed for Chapter 11 bankruptcy protection on Sunday to save the company and ensure future profitability.

The move was expected by Wall Street analysts as the retailer’s financial problems mounted. The Texas-based company, with 103 stores in 34 states and the District of Columbia, sells storage products and custom cabinets.

The Container Store said this does not mean the end of the retailer. The company said it has filed for voluntary Chapter 11 protection in the Southern District of Texas Bankruptcy Court as it plans to “implement a recapitalization transaction to strengthen its financial position, advance growth initiatives and drive improved long-term profitability.”

At least 90% of the company’s lenders agreed to support its bankruptcy plan, which would provide the company with $40 million in new financing, help it reduce its debt by at least $45 million, make debt repayment easier and extend the time required to pay off remaining debts.

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The company said it will continue to operate its business as usual, offering products and in-home services to customers “without interruption.” Additionally, its stores and website will “continue to operate as usual.” The company also said all customer deposits and orders will be honored and delivered as usual.

However, a source familiar with the matter told FOX Business that the process “allows companies to renegotiate the terms of their leases to align their store footprint with market realities and business needs.” Should the company fail, “significant rent reductions will be granted.” reach, it may be forced to close some select locations,” the source said.

A Container Store outlet on Santana Row in Silicon Valley, San Jose, California, January 3, 2020. (Smith Collection/Gado/Getty Images)

“The Container Store is here to stay,” said CEO Satish Malhotra, adding that the bankruptcy process will help the company advance its business and strengthen its capabilities.

“We are particularly excited about the future of our bespoke space offerings, which continue to demonstrate their strength,” said Malhotra. “We want to maintain our strong workforce and remain committed to providing our customers with an exceptional experience as we execute this recapitalization and for many years to come.”

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The retailer, known for its organizational solutions, quickly rose to prominence thanks to the success of the Netflix series “Tidying Up,” which premiered in 2019.

Today it is struggling with a weaker real estate market and a growing availability of cheaper alternatives. Earlier this month, shares of The Container Store were halted on the New York Stock Exchange as it prepared to delist the stock because it had fallen below the NYSE’s continuous listing standard. This standard requires listed companies to maintain an average global market capitalization of at least $15 million for 30 consecutive trading days.

Shopping carts at a Container Store location in New York on November 4, 2013. (Jin Lee/Bloomberg via / Getty Images)

Eric Snyder, a partner at New York-based Wilk Auslander LLP, previously told FOX Business that real estate market conditions and growing competition have “made this brick-and-mortar business … an unnecessary purchase.”

The company doesn’t benefit from holiday sales because its products aren’t considered discretionary purchases, which Snyder said exacerbates its problems.

“For this reason and the loss of a $40 million lifeline from Beyond, bankruptcy and a quick sale are the only options,” Snyder said. Beyond Inc., which owns Bed Bath & Beyond and Overstock.com, has backed out of a deal to invest $40 million in Container Store Group as part of a new partnership.

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Beyond originally planned to invest in the company and use an area within the Container Store’s real estate locations to showcase its range of kitchen, bathroom and bedroom items, which would be co-branded. But Marcus Lemonis, executive chairman of Beyond Inc., said last month that the company had concerns that The Container Store might not be able to reach an agreement on terms with its lenders the financial needs of the deal.

Latham & Watkins LLP served as legal counsel to The Container Store. The investment bank Houlihan Lokey acted as financial advisor. FTI Consulting acted as financial and communications advisor and A&G Realty acted as real estate advisor.