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Off-price retailer Tuesday Morning is handing back the keys to even more of its landlords as it works its way through its second bankruptcy proceedings in three years, even as its new owner Hilco markets its brand and intellectual property to would-be buyers.
The nearly 50-year-old retailer is expected to hand back the keys to its North Texas distribution center, which is attached to one of its stores, as well as its Dallas headquarters and more than 50 stores by the end of Wednesday. In an emergency hearing in the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth division, Judge Edward Morris approved a motion extending the deadline in which Tuesday Morning can assume or reject its remaining retail leases of about 144 stores from June 14 to July 14.
Hilco, which now owns Tuesday Morning, has the rights to the remainder of its retail leases where they are conducting going out of business sales. Hilco did not respond to a media request from CoStar News seeking additional information about its plans for Tuesday Morning’s leases.
Judge Morris also granted the retailer the ability to modify a lease tied to its distribution center, in which it can shrink its square footage to only the attached 19,274 square feet of retail space. In the hearing, the landlord and Tuesday Morning agreed to a rent reduction by $350,000, paying only $50,000 for the month of June. Employees are expected to hand back the keys to the distribution center before midnight, an attorney on behalf of Tuesday Morning told the court.
“This lease is not being rejected or assumed,” said Deborah Perry, an attorney with Munsch Hardt Kopf & Harr on behalf of the debtors. “There is still a substantial amount of inventory in this store that will continue to be sold through the month of June.”
Like the distribution center lease, Tuesday Morning was expected to vacate its Dallas headquarters and about a quarter of its retail leases by end of day Wednesday.
The landlord entity behind the retailer’s Dallas headquarters at 6250 Lyndon B. Johnson Freeway has told the bankruptcy court the company has yet to remove is furniture, fixtures and personal belongings of employees at the office building, even though the company said it planned to exit its office space at the end of May. In an objection filed with the court, the landlord’s attorney said, “During [a representative’s] last visit, the HQ was filled with furniture, equipment, and other personal property” of employees, as well as inventory from closed stores.
The landlord is alleging the rejection of the office lease is not effective until the debtor removes its abandoned property. Tuesday Morning, which told the court it planned to abandon all the remaining inventory, furniture, fixtures, equipment and other personal property at rejected lease locations, has yet to respond to the objection filed by the landlord.
Here’s a list of the 56 store leases rejected effective Wednesday, which CoStar News confirmed individually on Tuesday Morning’s website:
Alabama: 12090 County Line Road in Madison.
Arizona: 11835 N. Oracle Road in Oro Valley; 10050 W. Bell Road in Sun City.
Arkansas: 7810 Rogers Ave. in Fort Smith; 2701 E. Race Ave. in Searcy; 4332 Central Ave. in Hot Springs; 2516 Cantrell Road in Little Rock.
Florida: 7928 Front Beach Road in Panama City Beach; 911 Lithia Pinecrest Road in Brandon; 99 Elgin Parkway NE in Fort Walton Beach; 6050 N. Lockwood Ridge Road in Sarasota.
Illinois: 900 Route 22 in Fox River Grove.
Indiana: 6935 Lake Plaza Drive in Indianapolis.
Kansas: 14950 W. 87th St. in Lenexa; 5320 Martway St. in Mission; 8038 W. 151st St. in Stanley.
Louisiana: 176 Gause Blvd. W. in Slidell; 4800 Line Ave. in Shreveport.
Maryland: 210 Marlboro Ave. in Easton.
Mississippi: 2650 Beach Blvd. in Biloxi; 630 Grants Ferry Road in Flowood; 1053 E. County Line Road in Jackson.
Missouri: 4310 Gretna Road in Branson; 2639 E. 32nd St. in Joplin.
New Mexico: 1723 E. University Blvd. in Las Cruces.
North Carolina: 1800 Four Seasons Blvd. in Hendersonville; 44 Westgate Parkway in Asheville; 3394 S. Church St. in Burlington; 1039 S. College Road in Wilmington.
Ohio: 8178 Montgomery Road in Cincinnati.
Oklahoma: 3721 W. Main St. in Norman; 3801 NW Cache Road in Lawton; 1111 Garth Brooks Blvd. in Yukon; 7517 SE 15th in Midwest City.
Pennsylvania: 1825 Columbia Ave. in Lancaster; 3332 Wilmington Road in New Castle;
South Carolina: 932 N. Lake Drive in Lexington; 1 Sherington Drive in Bluffton
Tennessee: 1951 Madison St. in Clarksville; 1250 NW Broad St. in Murfreesboro; 820 25th St. NW in Cleveland; 632 W. Poplar Ave. in Collierville
Texas: 24427 Katy Freeway in Katy; 401 W. Interstate 30 in Garland; 17937 Interstate 45 S in Shenandoah; 3150 Pat Booker Road in Universal City; 2325 S. Stemmons Freeway in Lewisville; 2315 Richmond Road in Texarkana; 2727 61st St. in Galveston; 6808 Huebner Road in San Antonio; 870 S. Mason Road in Katy; 4610 N. Garfield in Midland; 410 Padre Blvd. in South Padre Island; 3301 S. 14th St. in Abilene; 2737 W. Park Row Road in Arlington.
Virginia: 540 Pantops Center in Charlottesville.