The Container Store Files For Bankruptcy: What Happens To IL Locations

ILLINOIS — The Container Store, which has six locations in Illinois, filed for Chapter 11 bankruptcy Sunday, according to the business.

The move comes as the Texas company has struggled to raise cash and faced stunted sales and increasing competition from retailers like Target and Walmart.

The Container Store's locations will remain open during the bankruptcy process and all customer deposits and orders will be honored and delivered as normal, according to the company.

“The Container Store is here to stay,” President and CEO Satish Malhotra said in a news release. “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.”

Stores in Illinois include locations in Oak Brook, Northbrook and Schaumburg, as well as three locations in Chicago.

Trading of company shares was suspended two weeks ago by the New York Stock Exchange when the business failed to maintain the required average market capitalization of at least $15 million. An agreement with the owner of Bed Bath & Beyond, Overstock and Zulily that would have come with a $40 million cash infusion fell through last month.

In its most recent quarter, the company reported losses of $16 million, and comparable store sales dropped 12.5 percent.

The Container Store will emerge from the bankruptcy process as a private company under the ownership of term loan lenders, at least 90 percent of whom have agreed to a recapitalization that will provide $40 million in financing and $45 million in deleveraging, according to the business. The company expects to confirm a reorganization plan in the next 35 days.

Founded in 1978, The Container Store has over 100 locations nationwide.

The Associated Press contributed to this story.