The home goods retailer Bed Bath & Beyond filed for Chapter 11 bankruptcy protection on Sunday, April 23, after it was unable to raise enough money to keep operating. A liquidation sale has started.
After experiencing rapid growth in the 1990s as the hotspots for newlyweds and expectant couples, the home goods business has seen demand decline in recent years due to the failure of a marketing strategy to sell more store-branded items.
"Millions of customers have trusted us through the most important milestones in their lives - from going to college to getting married, settling into a new home to having a baby. Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and buybuy BABY," CEO Sue Gove stated, as reported by CNBC.
Declaration of Chapter 11 Bankruptcy
Bed Bath & Beyond reported a loss of over $393 million and a 33% drop in revenue for the quarter ending November 2022. This followed the company's decision to forsake that approach last year and instead bring in more nationally recognized brands.
According to a court document seen by Reuters, the Union, New Jersey-based store assessed its assets and liabilities to be between $1 billion and $10 billion when it filed for bankruptcy in a court in the District of New Jersey.
A pledge for roughly $240 million in debtor-in-possession finance from Sixth Street Specialty Lending was made public, the firm remarked in a statement.
The store has started a liquidation sale, although it plans to utilize the Chapter 11 procedures to hold a limited sale and marketing process for part or all of its assets, as said in the report.
Company officials also said that although they are working to close their 120 buybuy BABY shops, their 360 Bed Bath & Beyond stores and their respective websites would stay open and continue serving consumers.
Unsuccessful Recovery Attempts
After announcing over $500 million in fresh funding, layoffs, and the closure of 150 stores in the span of a few months, the company's capacity to continue as a going concern was called into question in January.
Attempts to avoid bankruptcy prompted the struggling store to prepare an offering of preferred shares and warrants in February, hoping to earn roughly $1 billion.
In order to cover loan defaults and interest payments on senior notes, Bed Bath & Beyond raised $360 million via the complex setup. However, the company walked away from the arrangement in late March, declaring its intention to sell $300 million worth of shares. Reuters said this might be an indication that it would declare bankruptcy if it did not get the money.
An official court document announced Bed Bath & Beyond's Canadian closure in early February. Consulting firm Alvarez & Marsal revealed in a filing that its Canadian branch, which runs 54 Bed Bath & Beyond shops and 11 buybuy BABY locations, is bankrupt.
