Last week, the retail world woke up to the news that Tuesday Morning – the discount home goods brand – had filed for bankruptcy for the second time in the company’s history. Tuesday Morning’s first bankruptcy filing in 2020 – a result of the challenges of operating during a pandemic – led to the permanent closure of roughly a third of the brand’s locations. We dove into the latest visitation metrics for Tuesday Morning to take a closer look at what the most recent proceedings could mean for the chain and other retailers in the home furnishings space moving forward.
Dawn of a New Day
Tuesday Morning filed for bankruptcy in 2020 and subsequently underwent an aggressive rightsizing effort – going from 700 stores in 2020 to 480 in 2023. The strategy seems to have paid off as both visits and visits per venue began to climb in Q3 2020. And since then, visits per venue have significantly outperformed overall visits, indicating that the locations that remained open are seeing more visits today than they were before the bankruptcy filing.
Tuesday Morning’s Wake-Up Call
Tuesday Morning appeared to be on the right track in 2021 as average visits per venue soared. However, when comparing 2021 foot traffic to 2022, it’s now clear that 2021 was an unusually strong year for foot traffic in the home furnishing space due to pent up consumer demand and stimulus buying power, as well as the persistence of remote and hybrid work. And 2022’s visit gaps indicate that these trends likely played a significant role in Tuesday Morning’s visit boost in 2021.
Comparison of Tuesday Morning’s average visits per venue in 2022 to 2019 – before the brand closed a significant number of stores – helps to put the brand’s performance into perspective. 2022’s average visits per venue were closer to 2019 levels than they were to 2021, which could indicate that the company didn’t close enough locations to sustain prolonged visit growth when rightsizing in 2020. The current plan to shut a number of underperforming stores could provide the long-term balance sought after by the chain.
Brands Rise and Shine
2022 wasn’t a particularly favorable year for foot traffic in the home furnishings category as a whole. Inflation and a general curbing of discretionary spending led to underwhelming visit numbers to the space for much of the year, and in that respect, Tuesday Morning was not alone. However, the winds of change appear to be blowing in recent months. Compared to the previous year, visits to several home furnishings brands – including Tuesday Morning – appeared to be on the upswing in the final months of 2022 and the start of 2023.
In January 2023, Homesense, World Market, and Bob’s Discount Furniture reached 2.6%, 7.8%, and 18.4% year-over-year (YoY) visit growth, respectively. These rising stars, as well as their peers in the category who have also seen their YoY visit gap shrink in recent months, could continue to see visits climb as Tuesday Morning contracts its footprint in the home furnishings space.
Who Will Benefit from Tuesday Morning’s Rightsizing?
Some brands are particularly well positioned to benefit from Tuesday Morning’s store closures. Cross-shopping data indicates over a quarter of consumers who visited Tuesday Morning in 2022 also visited HomeGoods and At Home, while at least 12% of Tuesday Morning shoppers also visited World Market and IKEA. As Tuesday Morning rightsizes its fleet, some consumers may find their local store permanently closed – which may drive increased traffic to the other home furnishings brands that already appeal to this audience.
Every Cloud Has a Silver Lining
With the news of Tuesday Morning’s bankruptcy filing comes optimism that the brand can once again bask in the sunlight. In what has been a harsh reality of late in the home furnishings category, several brands are turning a corner in recent months and experiencing upward foot traffic trends.
To learn more about the data behind this article and what Placer has to offer, visit https://www.placer.ai/.
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