💥Leaky Container💥

Container Store Inc. ($TCS), Casa Systems Inc. ($CASA), MVK Holdco, Humanigen, Lordstown + More

This week let’s look into a couple of names on our minds and revisit some sh*tcos…

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⏩One to Watch: The Container Store Inc. ($TCS)⏩

Source: Getty Images

There’s truly no better way to start off a new year than to look at an underperforming retailer…

The Container Store Group Inc. ($TCS) is a fairly well-known brick-and-mortar retailer at this point but for those of you who style your dwellings like PigPen from Charlie Brown, you should know that TCS’s speciality is storage and organization solutions (yes, we know, super sexy). “Organization solutions” in this case referring to shoe racks, laundry baskets and hangers (again, yes, super sexy).

Founded in 1978, PE firm, Leonard Green and Partners LP (“LGP”), bought the company in 2007. An IPO followed in 2013 with LGP still holding a controlling interest until 2020 when LGP reduced ownership to <50%. As of July 6, 2023, LGP owned 15.7mm shares or ~30.4% of current shares outstanding.

The company operates 98 stores with average size of ~24k sq ft (18k selling sq ft) in 34 states + DC and has two main segments, the core TCS business and its wholly-owned Swedish subsidiary, Elfa International AB, which, for its part, sells over-priced closet organization systems that our very own Johnny swears by.

If you’re thinking to yourself, “how are coat hangers and laundry baskets not a completely commoditized good?” you’re off to a great start in ‘24 because they totally are. TCS, however, is pricier than its competitors which puts them squarely as the “premium” supplier/brand in the market.

Take a look at these hangers sold on Amazon: