Newsman: The home goods retailer Bed Bath & Beyond has filed for bankruptcy protection after months of losing shoppers and money. As recently as 2018, the chain had over 1,500 stores. Bed Bath & Beyond filed for Chapter 11 bankruptcy protection Sunday, ending a tumultuous chapter for the struggling home goods retailer.
The company said in a statement that “it and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey to implement an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets.”
The retailer says its 360 Bed Bath & Beyond stores and 120 BuyBuy Baby stores remain open, but will shutter over time. Starting on Wednesday, April 26, the chain will stop accepting coupons and discounts and sales will be final. Gift cards are expected to stay valid through May 8.
“We appreciate that our customers have trusted us through the most important milestones in their lives – from going to college, to getting married, to settling into a new home, to having a baby,” the company said in an email to shoppers on Sunday. “We have initiated a process to wind down operations.” Since first warning of a bankruptcy in January, Bed Bath & Beyond has exhausted numerous last-ditch efforts to shore up financing, including store closures, job cuts and several lifelines from banks and investors.
The company had spent the past year announcing a series of job cuts and store closures as it looked for financing options to stay afloat.
To help fund its operations in bankruptcy, it said Bed Bath & Beyond had raised $240 million from the investment firm Sixth Street Specialty Lending.
It added that the 360 Bed Bath & Beyond and 120 Buy Buy Baby locations and websites would stay open and continue to serve customers as the company begins to shutter its retail locations.
The involvement of the most recent activist, GameStop Chairman Ryan Cohen, breathed new life into the company’s shares one year ago. But five months after appointing three board members, Cohen sold his shares in the company, sending its value plummeting.
Founded as Bed ’n Bath by entrepreneurs Warren Eisenberg and Leonard Feinstein in 1971, the first two stores opened in Springfield, New Jersey, and Cedarhurst, New York. The company went public in 1992 and, as late as 2019 it had a market value of $2.3 billion and employed 62,000 people.
The retailer previously cited “lower customer traffic and reduced levels of inventory availability” as it flagged “substantial doubt about the company’s ability to continue as a going concern.” A preliminary report for the holiday-season quarter showed sales falling 40% to 50% from a year earlier. Sales had fallen similarly in the quarter before that, down 32%.
During the pandemic, the chain missed out on the historic home-goods shopping boom because it was in the middle of an overhaul that involved replacing big name brands with more profitable private brands. The strategy exacerbated the industry-wide supply chain crisis, leaving top products like KitchenAid mixers missing from Bed Bath’s shelves.
Last year, its shares rose and crashed as a meme stock on the news that activist investor Ryan Cohen invested in the company. He shook up corporate leadership and then cashed out of his bet with a tidy profit.
Then there were hundreds of store closures, sweeping layoffs and news of the shocking death of the company’s financial chief.
Late last summer, the company had secured financing to propel it through the holiday shopping season. But lackluster sales led to waning enthusiasm from creditors in a trickier economic environment.
In January, the chain defaulted on some of its loans, prompting those lenders to cut off its credit. The company began striking last-chance deals to stay afloat, selling more shares, asking landlords for breaks on rent and even having another company pay for its merchandise. In mid-April, its stock price sank to 24 cents.
