BY Fraser Tennant
In a move that will see the closure of 26 “underperforming” stores, home goods chain At Home has filed for Chapter 11 bankruptcy to strengthen its financial foundation and position the business for long-term success.
The filing will allow At Home to implement a restructuring support agreement (RSA) with lenders holding more than 95 percent of the company’s debt. The agreement sets forth terms of a prearranged financial restructuring that will eliminate substantially all of the company’s nearly $2bn in funded debt.
Pursuant to the RSA, following the consummation of its restructuring, the company expects there will be a transition of ownership of At Home to the lenders supporting the RSA and providing the company with new capital.
“We are pleased to have reached this agreement with our lenders, which represents a critical and positive advancement of our work to best position At Home for the future,” said Brad Weston, chief executive of At Home. “Over the past several months, we have taken deliberate steps to strengthen the foundation of our business – sharpening our focus, elevating our customer value proposition and driving operational discipline.”
In connection with this process, At Home is entering into an agreement for $600m in debtor-in-possession financing, which includes a $200m capital infusion from certain of its existing lenders and a ‘roll up’ of $400m of existing senior secured debt.
At Home has also filed a number of customary ‘first day’ motions with the bankruptcy court to maintain business operations, facilitate the efficient administration of the Chapter 11 cases and uphold its go‑forward commitments to its stakeholders, including the continued payment of team member wages and benefits without interruption.
“These efforts are aimed at delivering sustained sales growth, optimizing our inventory management, improving efficiency and enhancing overall profitability,” continued Mr Weston. “While we have made significant progress advancing our initiatives to date, we are operating against the backdrop of an increasingly dynamic and rapidly evolving trade environment as we navigate the impact of tariffs.”
Upon emergence from the prearranged restructuring process, At Home expects to move forward with new owners and a meaningfully strengthened balance sheet.
Mr Weston concluded: “The steps we are taking to fully de-lever our balance sheet will improve our ability to compete in the marketplace in the face of continued volatility and increase the resilience of our business for the long term.”
News: At Home files Chapter 11 bankruptcy, will close 26 stores