Home goods retailer Tuesday Morning has entered into a $35 million financing agreement that will grant a “change in control” over the retail company and add new board members.
Retail Ecommerce Ventures (REV) and Ayon Capital agreed to lend Tuesday Morning $32 million in convertible debt financing with an additional $3 million in financing coming from certain members of Tuesday Morning’s management team, including Chief Executive Officer Fred Hand, according to a September 9 press release.
In July, the retailer hired consultants to help explore restructuring options and possible corporate maneuvers following a bankruptcy filing two years ago.
“We believe this milestone transaction will strengthen our financial position and provide sufficient liquidity to execute on our strategic plan, allowing us to maintain strong relationships with our valued partners and elevate offerings for our customers,” said Hand. “We look forward to the partnership with REV and Ayon.”
Miami-based REV owns retail consumer brands such as Pier 1 Imports, Linens’ n Things, Stein Mart, and Modell’s Sporting Goods.
As part of the deal, Tuesday Morning agreed to sell Pier 1 Imports products in its stores and will gain access to REV’s fulfillment network, infrastructure, systems, technology, and e-commerce capabilities. REV and Ayon Capital will also get to designate a majority of the company’s new board members.
REV co-founders Tai Lopez and Alex Mehr are excited about the long-term opportunity for Tuesday Morning in the home goods and décor category, especially in a post-pandemic world.
“We look forward to making our transformation expertise, technology capabilities, and the Pier 1 brand available to the company. Our experienced and proven team is the right partner at the right time for Tuesday Morning,” said Lopez and Mehr.
Tuesday Morning has struggled to make an effective digital e-commerce transformation, citing a business model that features frequent inventory changes and limited product quantities.
The strategic investment between REV and Ayon will strengthen the company’s balance sheet and allow it to begin executing an omnichannel strategy, according to the report. As part of the new strategy, Tuesday Morning will improve its e-commerce presence and digital activations to complement the company’s footprint over the long run.
“Ayon is pleased to partner with REV and TuesdayMorning’s management team to fund the company’s evolution,” Ayon Chairman Sidd Pagidipati said. “Tuesday Morning offers unique value in the home goods category, and by making this significant investment, we are excited to be part of the next chapter at Tuesday Morning,” he said.
Tuesday Morning has several locations in the Metroplex.
The transaction is expected to close on or about September 19, 2022.
