• The CEO of The Container Store is stepping down weeks after the company exited bankruptcy.
• In a memo obtained by BI, the board told employees Wednesday that chairman Joe Bines would lead a new "Office of the CEO."
• After a pandemic bump, sales have struggled and the company previously disclosed $230 million in debt.

The Container Store's CEO, Satish Malhotra, is leaving the company weeks after it exited bankruptcy, according to internal communications viewed by Business Insider.

Malhotra's exit is effective immediately as he moves on to "pursue other opportunities," the company said in a memo to employees.

Malhotra joined the housewares retailer in 2021 after more than 20 years with Sephora, where he was the chief revenue officer and the chief operating officer.

The Container Store's board of directors told employees on Wednesday that it is forming the Office of the CEO, which would be led by board chairman Joe Bines and include chief transformation officer Martin Schumacher. Employees will report to the same managers, while Malhotra's direct reports will work with the Office of the CEO.

Wednesday's memo said that the company is "stronger and healthier" after its restructuring and is ready to "recapture a dominant position."

Neither the company nor Malhotra responded to Business Insider's requests for comment. The Dallas Morning News first reported the changes.

Sales at The Container Store, which sells home organization supplies, saw a pandemic bump but struggled in subsequent years as US retail spending slowed. The company disclosed $230 million in debt in its bankruptcy filings in December.

In January, a US bankruptcy judge approved a restructuring agreement that allowed the company to cut $88 million in debt and go private under the ownership of Golub Capital and Glendon Capital Management.

"With our restructuring process now behind us, we have renewed energy and excitement to deliver for our customers," Malhotra said at the time.

Prior to the bankruptcy filings, the company announced a $40 million deal with former rival Bed Bath and Beyond, but that ultimately fell through.

The Texas-based company has around 100 physical stores in the US and an online presence.

• Big Lots, Party City, and The Container Store reported either bankruptcy or store closures recently.
• It's a cap on a tough year for many retailers.
• Shoppers of almost all income levels have been watching their spending in 2024.

Trouble for a trio of retailers at the tail end of 2024 is a sadly fitting end to a tough year for retailers.

Home storage chain The Container Store filed for Chapter 11 bankruptcy on Sunday. The retailer plans to reorganize and its CEO said that the company "is here to stay," but it said in May its full-year consolidated net sales dropped almost 20% year-on-year, and in October that second-quarter sales on the same basis fell 10.5%.

A day earlier, Party City said it would wind down operations and close all of its stores. That's on top of Big Lots, which said last Thursday it would start store-closing sales at all of its locations after its planned sale to a private equity firm fell through.

The few days of bad news caps a rough year for many retailers. Over 2,000 stores have closed this year in the US, by Business Insider's count.

Among the companies that have shuttered stores are drugstore chains CVS and Rite Aid, Family Dollar, and convenience store chain 7-Eleven.

Even some big-name chains that aren't closing stores are still having trouble. Starbucks' sales fell in the latest quarter, showing that new CEO Brian Niccol — brought in abruptly to help revitalize the company — has plenty to address at the chain in 2025.

Starbucks store employees have told BI that the coffee chain has operational issues to work out, from not scheduling enough workers at busy times to finding a better way to fill mobile orders.

Big Lots, Party City, and The Container Store all have pointed to recent economic factors, namely inflation and consumers who are less willing to spend.

In its statement on Saturday, for instance, Party City cited "an immensely challenging environment driven by inflationary pressures on costs and consumer spending, among other factors" in explaining the decision to wind down operations.

Satish Malhotra, CEO of The Container Store, referenced a "challenging macro-economic environment" in an email to customers this week.

Big Lots, meanwhile, has been saying for months that consumers were buying fewer couches, dining room sets, and other high-priced home furnishings. The chain saw "a significant consumer pullback in big-ticket items, particularly within the furniture and patio furniture categories," CEO Bruce Thorn said during an earnings call in June — the last one that the company hosted before announcing its now-scrapped deal to sell itself to Nexus Capital Management.

Inflation has decelerated this year for many items, yet shoppers are still cautious about what they buy, and prices for many items are still proportionally higher than before the pandemic. Many low-income consumers are having trouble stretching their paychecks to cover expenses, a development that has hurt Dollar General and other dollar stores.

More affluent consumers have also slowed their spending, turning away from stores where they have to pay full price and toward off-price chains like Nordstrom Rack as well as store-brand groceries at Walmart.

Even Target reported last month that many of its customers were sticking to buying essentials and shying away from impulse buys and more expensive items, leading the big box chain to cut its forecast.

So far, the outlook for 2025 isn't great. Advance Auto Parts and Walgreens have plans to shut 1,200 stores between the two chains, for example.

To be sure, all three retailers who reported bad news over the last few days faced challenges well before this month or even this year. Big Lots has been closing stores since last year. Party City filed for bankruptcy in January 2023. And The Container Store has reported quarterly drops in same-store sales for several consecutive quarters.

But if shoppers remain value-conscious and stick to stores they perceive as offering the best deals going into 2025, retailers could continue to have a tough time in the new year.

Do you work at a major retailer and have a story idea? Reach out to this reporter at [email protected]

• The Container Store, a home storage and organization chain, filed for bankruptcy on December 22.
• I visited the store's Manhattan location in September.
• I loved the wide variety of options but concluded I'm not the store's target customer for now.

Before I moved to New York City, everyone warned me about the shoebox apartments I'd have to get used to.

They weren't wrong.

Living in a one-bedroom apartment definitely requires some innovative storage solutions. In the past year, I've looked to stores like Target, Ikea, Walmart, and Amazon for homeware items, but I can't stop my Type-A mind from searching for options to make my space more efficient.

Enter The Container Store, a home storage and organization retailer founded in 1978 in Texas. The company now has 102 stores across the US.

However, while the company boasts a cult-like following, sales have struggled. On December 22, the company filed for bankruptcy, revealing in court documents that it's $230 million in debt. Still, CEO and president Satish Malhotra said, "The Container Store is here to stay."

The filing comes after months of other documented financial struggles. In June, The Container Store reported that first fiscal quarter sales were down 12.2% compared to the same period in 2023. The following month, Modern Retail reported that the company hadn't "posted a full-year profit" since 2021.

In September, I visited The Container Store's Sixth Avenue location in Manhattan to see if the storage solutions were right for me and if I could understand the brand's sales decline.

Here's what I found.

When I entered the Manhattan store, I was happy to see it lived up to its name, with aisles and aisles of — you guessed it — containers.

As soon as I stepped inside, I was shocked at the massive space. According to the retailer's website, stores have "an average size of approximately >24,000 square feet (18,000 selling square feet)."

Though this location spanned just one floor, all I could see were aisles and aisles of items lining its perimeter and throughout its center.

The store was largely sectioned by the room you're looking to organize, such as the closet, bathroom, kitchen, garage, office, and more.

I started with the closet section and loved the look — but not the price — of these Drop-Front Shoe Boxes.

During my visit, a case of six was on sale for $59.99, but I still couldn't justify purchasing these, given that my boyfriend and I easily have about 30 pairs of shoes — it would cost us about $300 at a minimum.

But even if we were comfortable justifying the price, I wouldn't expect these boxes to be very apartment-friendly given their size; one case of six measures 11 1/16 inches by 14 7/16 inches by 7 1/4 inches.

As much as I would love to include these in a future dressing room, I had to pass.

As expected, there were plenty of decorative bins, like this Scalloped Maize Storage Bin.

This one was a good size at 11 inches by 15 inches by 8 1/2 inches and retailed for $29.99.

There was no shortage of hangers.

My favorite was the Non-Slip Velvet Suit Hangers, which retailed for $9.99 for a 10-pack.

Though I didn't need any more hangers, I would definitely consider purchasing from here in the future, thanks to the wide selection of colors and materials.

I loved these jewelry boxes by Stackers.

There were plenty of drawer options customers could "stack" to build their perfect custom jewelry box, which I loved.

However, I had difficulty locating the prices of each drawer type on the shelves.

The Stackers Belt Organizer seemed like a great practical gift for the holidays.

This belt organizer, retailing for $24.99, could sit on a closet shelf or in a drawer next to similar organizers.

Moving on to bathrooms, there were plenty of countertop organizers.

There were plenty of decorative storage options, from soap dispensers and toothbrush holders to apothecary jars and trays.

But I don't understand the appeal of acrylic.

The Luxe Acrylic Large Tray pictured above satisfies an itch in my brain that loves the aesthetically pleasing bathrooms I see on Pinterest and TikTok.

But, having been fooled by acrylic pieces, I think these dishes seem more trouble than they're worth. Given the likelihood of dried water, toothpaste, and soap drips, this tray could easily become an eyesore, just like my old acrylic toothbrush holder did.

These pieces don't appear to serve much purpose, especially at a cost of $24.99.

I was shocked to see this makeup organizer retailing for $60.99.

As smart as this storage kit looked, I would never spend this amount when similar options on Amazon are sold at fractions of the price.

And I'm not sure how useful a toilet roll dispenser could really be.

Maybe I'm missing out — and maybe it speaks to the space I have in my bathroom — but for $49.99, I'd rather just grab a new roll of toilet paper from the pack when I need it.

However, I really liked these hair tool storage options.

My hair dryer and diffuser attachment have a bad habit of getting tangled under my sink, so I could see this being a great addition to my bathroom that would be worth the $25.

And I enjoyed browsing the mock closets by Custom Spaces.

One thing I didn't know about The Container Store before my visit was that it has staff designers available to help curate "Custom Spaces."

In collaboration with acquisitions Elfa and Closet Works, "Custom Spaces" was identified as a key part of the company's growth strategy.

Launched in November 2022 as a rebranded expansion of the company's "Custom Closets," The Container Store's Custom Spaces "is defined by three areas of the home: Closet Spaces, Living Spaces, and Garage Spaces," the company said at the time.

As part of this effort, The Container Store launched a new "Garage + Elfa" line in October 2023 and expanded its "Decor+ by Elfa" line in June 2024. Elfa was not included in the bankruptcy.

My favorite section to explore was all of the aisles dedicated to kitchens.

Look at all these storage options!

These Montana Jars were added to my holiday wishlist immediately.

These jars appeared straight out of my Pinterest dreams and seem perfect for holding baking ingredients like flour and sugar.

The collection includes three jar sizes: 1.5 quarts, 2 quarts, and 3 quarts. They retail for $19.99, $21.99, and $26.99, respectively, making the full collection about $69.

Plastic and stainless-steel scoops were also available on another shelf nearby.

This water bottle organizer also deserves a spot in my cabinets.

YouCopia's Upspace Bottle Organizer 2-Shelf holds eight to 10 bottles and costs $24.99.

This bakeware organizer makes great sense, especially in a small living space.

Even if I'm not happy with its $65.99 price tag.

I also appreciated this shopper-friendly display for mapping drawer organizers.

If you're looking for something specific, visit the store with measurements in mind so you don't have to guess what product would best fit your space.

However, I wasn't sold on this $45 spice rack.

Call me picky, but I wouldn't like picking through the bottles to find the spice I'm looking for, and I'm not a huge fan of labels.

But if you are a fan of labels, they have plenty.

Near the crafting section were packs of labels for kitchens, laundry rooms, bathrooms, playrooms, and more.

Each pack from the "Everything Organizer Collection" retailed for $12.99.

I moved on to more storage options for clothing.

This section included plenty of laundry baskets to choose from.

I have closet organizers like these, which've been a lifesaver for small spaces.

They're perfect for maximizing closet space when there isn't much room for dressers.

I also found a few kid-friendly storage options.

These animal-themed bins seemed perfect for a child's bedroom or an elementary school classroom, but I was a bit surprised by the cost.

For example, the peacock storage cube was listed for $19.99, but another unpictured sloth cube was listed for $26.99.

There were also sets of rainbow-colored storage bins and rolling chests.

I was surprised to see Jason and Kylie Kelce while walking through the garage section.

Malhotra told Modern Retail in July that the brand is "starting to do more collaborations."

"I think the partnership we did with the Kelces was really encouraging for customers to see," he said. "Oftentimes, they think that expense is a reason why things are not done, and they look at someone like the Kelces and they go, 'Obviously money is not an issue for them.' Their issue was knowledge, time, and solutions, and that's why they wanted to work with The Container Store."

There were plenty of options for trash cans, too.

Ranging in size, color, and material, I loved the variety available.

I also enjoyed browsing the office and stationery sections.

There were so many trinkets, pens, and notepads to choose from.

There were fun options, like this candy-themed highlighter pack.

I would've loved having these in my pencil pouch in elementary school.

I liked the simplicity of this to-do list by Ramona & Ruth.

If I didn't already own four different notebooks and calendars, this would've been a very easy $15.99 out of my wallet.

I was also surprised by the number of seemingly random trinkets available.

Like this beginner crochet kit.

Here's another example: mushroom bookmarks.

I'm still unsure if this design makes much sense, but it is cute.

At this point, I started losing track of what aisles I'd already toured.

There were just so many choices.

Here are some more options in case you haven't seen enough.

The Weathertight Clear Totes looked like a great choice for reusable moving boxes and basement storage.

Prices ranged from $14.99 for a 6.5-quart tote to $34.99 for a 74-quart tote.

And who doesn't love a clearance section?

The store's clearance options were robust, with different plates, bowls, glassware, decor pieces, and more.

My favorite clearance item was this marble wine chiller.

Though this definitely wasn't a need, I'm disappointed I didn't snag one while it was on sale for $29.40.

Overall, my trip to The Container Store made me realize that I'm probably not the brand's target audience ... for now.

Malhotra told Modern Retail in July, "There will always be a cheaper alternative to a plastic bin. Our objective is not to compete there because we don't have the scale and buying power to do so."

Instead, he said it's about offering "a white glove experience" through Custom Spaces and the brand's merchandise. He added that The Container Store differentiates itself from the Walmarts and Targets of the world by spending time with customers to help them choose the right products for their space.

Therefore, it seems that The Container Store is looking to target shoppers who have an established home base and plan to invest in it for years to come.

As a 20-something-year-old who plans to bounce from rental to rental for the next few years, I'm nowhere near that phase of my life. So, buying more expensive organizers that may only fit my current apartment isn't worth it.

However, if you have the money, space, and time, I completely understand falling in love with The Container Store. But for now, my visits will simply remain sources of inspiration.

The Container Store did not reply to a request for comment from Business Insider.