Dive Brief:
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The Container Store this week cut 2% of its workforce, affecting fewer than 70 people, mostly in corporate positions. Roles include tech positions and some store operations, an effort to streamline the reporting structure, a company spokesperson said by phone.
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Last month Satish Malhotra resigned as CEO, and has been replaced by an office of the chief executive officer run by board chair Joel Bines and Chief Commercial Officer Martin Schumacher.
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The retailer is also pausing capital projects as it works on a rebound from bankruptcy, the company said Monday. The Container Store filed under Chapter 11 at the end of December and exited about a month later with nearly $88 million less in debt.
Dive Insight:
As it reported falling sales for several quarters in the last couple of years, when it was still a public company, the Container Store often noted soft consumer demand. Tariffs are expected to undermine demand for discretionary items further, and it’s not clear how affected the retailer is on the supply side.
In general, “companies that generate sales and profits from a more discretionary offering which can be delayed in this environment” are among the “have-nots” when it comes to tariffs, according to a Monday research note from Telsey Advisory Group analysts led by Dana Telsey. Those include home-related retailers as well as department stores and luxury brands, Telsey said.
Still, The Container Store is soldiering on, as it did during its relatively brief bankruptcy process. Stores and its website remained open and vendors and other creditors were paid in full.
Operations remain in focus, and that priority is reflected in the company’s new leadership. Bines and Schumacher specialized in distressed retail transformations at AlixPartners. Bines also led the retail practice there for nearly 20 years, after a decade in operational roles.
Correction: This story has been updated to clarify that the majority of The Container Store's layoffs affected its corporate workforce.
