News Summary
At Home Group Inc. is entering Chapter 11 bankruptcy as part of a restructuring strategy aimed at eliminating nearly $2 billion in debt. The home décor retailer has secured a significant capital infusion to continue operations while transitioning ownership to its lenders. This move is designed to position At Home for a stronger future, enhancing efficiency and profitability. Customers can expect uninterrupted service as the company navigates through these changes, seeking to improve sales growth and inventory management.
Delaware
At Home Group Inc., a leading home décor retailer, has initiated voluntary Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware. This significant step is part of a restructuring support agreement (RSA) the company has secured with lenders holding over 95% of its debt. Through this agreement, At Home aims to eliminate nearly $2 billion in funded debt while obtaining a much-needed $200 million capital infusion.
As part of the restructuring plan, ownership of At Home is expected to transfer to its lenders, which include well-known investment funds affiliated with Redwood Capital Management LLC, Farallon Capital Management LLC, and Anchorage Capital Advisors LP. This transition in ownership marks a pivotal change for the company, which operates 260 stores across 40 states, providing a diverse range of home décor products, including furniture, rugs, and wall art.
Despite entering bankruptcy, At Home plans to maintain its in-store and online operations throughout the court-supervised restructuring. The company reassured customers that it will continue to provide regular services, including keeping its team member wages and benefits uninterrupted. Additionally, it has filed first-day motions with the court to support ongoing business operations during this challenging period.
To facilitate the restructuring process, At Home has secured a total of $600 million in debtor-in-possession (DIP) financing, which includes the $200 million capital infusion and a $400 million roll-up of existing senior secured debt. The approval of this financing is anticipated as critical for sustaining the company’s cash flow during the Chapter 11 proceedings.
Furthermore, cash collateral is expected to be available for At Home’s immediate use, enabling the company to navigate the complexities of bankruptcy while continuing to sustain its day-to-day functions. These arrangements highlight the company’s commitment to emerge from this period of financial distress with a stronger operational foundation.
At Home, under the leadership of CEO Brad Weston, aims to enhance sales growth, optimize inventory management, improve efficiency, and increase profitability through its restructuring strategy. This plan is seen as a vital step toward positioning the company for future success in a competitive retail environment affected by various challenges, including rising tariffs impacting product costs.
The company previously underwent a significant acquisition in 2021, when it was purchased by private-equity group Hellman & Friedman for approximately $2.8 billion, which included the assumption of a substantial amount of debt. The recent restructuring is a direct response to the financial pressures that have persisted since this acquisition and aims to create a sustainable model for growth moving forward.
For further information regarding the court-supervised restructuring process, At Home has established a dedicated resource at AtHomeRestructuring.com, where updates and details regarding the financial restructuring will be provided. The focus remains on stabilizing the business and ensuring that At Home continues to serve its customers effectively during this transition.
Deeper Dive: News & Info About This Topic
- Business Wire: At Home Group Enters Agreement for Ownership Transition
- Wall Street Journal: At Home Retailer Chapter 11 Bankruptcy
- Furniture Today: Possible Ownership Change in At Home’s Restructuring Strategy
- Chain Store Age: At Home Group Enters Chapter 11 Bankruptcy
- Bloomberg: Retailer At Home Files Bankruptcy with Lenders Set to Take Over
- Wikipedia: Chapter 11 Bankruptcy
- Google Search: At Home Group Inc
- Google Scholar: At Home Group Bankruptcy
- Encyclopedia Britannica: Bankruptcy
- Google News: At Home Group
