It's a tough time to be a home goods retailer. Already this year, Bed, Bath & Beyond, Tuesday Morning and Christmas Tree Shops have all had to declare bankruptcy and shutter all their locations, and now, another might be joining them. The Container Store has been struggling financially and they might not be able to recover.
Their sales have been down double digits this year and in May, they instituted layoffs to offset the issues they've been facing. The problems put them on the radar of credit reporting agency CreditRiskMonitor, which assesses a company and assigns them a score that predicts their likelihood of bankruptcy in the next 12 months. After examining The Container Store's year, they gave the company a 2, the second-worst rating possible, with nearly a 10 percent chance the store will need to declare bankruptcy in the next year. The scores have a 96% accuracy rate so it is pretty concerning.
The Container Store did very well when the pandemic hit, as more people stayed at home and needed goods from the retailer, but they've seen fewer customers lately. The chain tried to woo some of Bed, Bath & Beyond's customers, accepting the defunct retailer's coupons for a time, but it hasn't seemed to help.
CEO Satish Malhotra is aware of everything and trying to right the ship. In fact, he even took a 10% pay cut on his base salary so that the company's 5,000 employees could get their annual merit raises. No word yet on what the future holds for The Container Store or its 101 stores.