The general retail environment in the U.S. has been shaky as the rise of e-commerce pushes brick-and-mortar to the background.
The Container Store, a specialty retailer focused on storage and organizational products, operates just 93 stores in the U.S. making for a large white space opportunity.
Direct-to-consumer sales are growing at ~19% year-over-year, comprising approximately 8% of sales.
Yet the company remains leveraged with $277M in net debt and interest coverage at just ~1.9x EBIT.
We believe the valuation is fair, but not all that attractive when considering execution risk and weighed down balance sheet.
The Container Store (TCS) is a leading retailer of storage and organizational products operating 93 locations across 33 states. Operating mile deep in an inch-wide market, the company has been delivering what we