Dec 23 (Reuters) - Custom closets manufacturer The

Container Store ( TCSG ) filed for Chapter 11 bankruptcy protection in

the United States, as the retailer struggles with mounting debt

and weak consumer demand.

Muted spending on non-essential items such as home

improvement goods, electronics and apparel has hit sales at

retailers in the U.S. over the past couple of years.

The Container Store ( TCSG ) expects to confirm a pre-packaged plan

of reorganization within the next 35 days, it said in a filing

late on Sunday, adding that its website and 102 stores will

remain open during the process.

The Coppell, Texas-based company reported $243 million in

debt in the filing, up from about $173 million as of Sept. 30,

2023, according to the company's second-quarter earnings report.

It had entered into a transaction support agreement with

about 90% of its creditors to provide about $40 million in new

financing and $45 million in debt reduction, the company added.

"We intend to maintain our strong workforce and remain

committed to delivering an exceptional experience for our

customers while we execute this recapitalization and for many

years to come," said chief executive officer Satish Malhotra.

Beyond Inc ( BYON ), formerly Overstock, had agreed to

invest $40 million in The Container Store ( TCSG ) in October, but a few

weeks later said it had concerns over the retailer's ability to

reach an agreement with its lenders.

The online retailer had purchased home goods chain Bed Bath

& Beyond's brand name, intellectual property and ecommerce

platform during its bankruptcy proceedings for $21.5 mln last

year.

Beyond did not immediately respond to a Reuters request for

comment.

Off-price home goods retailer Big Lots also said last week

it was preparing to close its over 900 locations and begin a

"going out of business" sale months after it filed for

bankruptcy protection.