NEW YORK — Bed Bath & Beyond — one of the original big-box retailers known for its seemingly endless selection of sheets, towels and kitchen gadgets — filed for bankruptcy protection, after years of dismal sales and losses and numerous failed turnaround plans.
The beleaguered home goods chain filed the filing Sunday in US District Court in New Jersey, saying it will begin an orderly liquidation of its operations, while seeking a buyer for all or some of its operations. In the bankruptcy filing, the retailer said it expects to close all of its stores by June 30.
For now, the company’s 360 Bed Bath & Beyond stores and its 120 Buy Buy Baby sites, as well as its websites, will remain open to serve customers.
It listed estimated assets and liabilities in the range of $1 billion to $10 billion. The move comes after the company failed to secure funds to stay afloat.
In a statement, the company, based in Union, New Jersey, said it voluntarily filed “to effect an orderly liquidation of its operations while conducting a limited marketing process to solicit interest in one or more sales of all or part of its assets.”
The store closures will put thousands of jobs at risk. The company employed 14,000 workers, according to the court filing. That is a drastic decrease from 32,000 in February 2022.
Bed Bath & Beyond said it secured a commitment of approximately $240 million in financing from Sixth Street Specialty Lending, Inc. to allow it to continue operating during the bankruptcy process.
“It’s the death of an icon. A lot of people have grown up with it,” said Neil Saunders, CEO of GlobalData Retail.
Founded in 1971, Bed Bath & Beyond had for years enjoyed its status as a big box retailer that offered a wide selection of sheets, towels and accessories unmatched by department store competitors. It was among the first to introduce shoppers to many of today’s household items like the deep fryer or single-serve coffee maker, and its 15% to 20% coupons were ubiquitous.
But over the past decade or so, Bed Bath & Beyond struggled with weak sales, largely due to its cluttered assortment and lagging online strategy that made it difficult to compete with the likes of Target and Walmart, both of which have spruced up their home departments with sheets and higher quality bedding. Meanwhile, online players like Wayfair have attracted customers with affordable and trendy furniture and home decor.
In late 2019, Bed Bath & Beyond tapped Target CEO Mark Tritton to take the helm and turn around sales. Tritton quickly reduced coupons and began introducing store label brands at the expense of national brands, a strategy that proved disastrous for the retailer.
And the pandemic, which occurred shortly after his arrival, forced the retailer to temporarily close its stores. It could never use the health crisis to pivot to a successful online strategy that others had, analysts said. And while many retailers grappled with supply chain issues a year ago, Bed Bath was among the most vulnerable, missing many of its top 200 best-selling items, including kitchen appliances and personal electronics, for the 2021 holiday season.
The retailer axed Tritton in June 2022 after two back-to-back quarters of disastrous sales. In recent months, the company, under the leadership of recently appointed president and CEO Sue Grove, has gone back to its original strategy of focusing on national brands, instead of operating its own store labels. But the company has had difficulty getting suppliers to commit to supplying goods due to the retailer’s financial problems.
This past holiday season, stores were short of many key items, and it lost many customers, a problem that continued to plague the retailer through the winter and spring seasons.
The bankruptcy filing comes as the company’s shares have fallen even more as speculation about an imminent bankruptcy filing has increased. Its financial performance has also deteriorated. In late March, it noted that preliminary results showed anywhere from a 40% to 50% drop in sales at stores open at least a year for the quarter ended Feb. 25.
The company also said in a filing with the Securities and Exchange Commission in late March that it planned to sell $300 million worth of stock to avoid filing for bankruptcy.
The home goods retailer had issued several warnings about a potential bankruptcy filing since early this year. In late January, it noted in a government filing that it defaulted on its loans and did not have the money to repay what it owed. The company had said the default forces the company to look at various options, including restructuring its debt in bankruptcy court.
Bed Bath & Beyond joins a growing list of retailers that have filed for bankruptcy so far this year, including party accessories chain Party City and David’s Bridal. The bankruptcy may offer a window into what’s to come in retail, given the changing landscape and increasing challenges in the US economy.
During the depths of the pandemic, a number of retailers filed for Chapter 11 bankruptcy including Neiman Marcus and JC Penney. But 2022 saw a lull in retail bankruptcy filings as shoppers, with government stimulus money and a pile of savings, spent with abandon, helping lift retailers of all kinds. But as credit tightens and inflation remains stubborn, shoppers have tightened their purse strings in recent months, leaving struggling retailers like Bed Bath & Beyond more vulnerable.
Bed Bath & Beyond had been trying to turn around its business and cut costs after the former management’s new strategies exacerbated a sales slump. The company announced last August that it would close around 150 of its namesake stores and cut its workforce by 20%. It also provided more than $500 million in new funding.
Bed Bath & Beyond’s shares, which were trading at crisis levels, have also been on a turbulent course. It made a monstrous run from $5.77 to $23.08 in a little more than two weeks in August. The trade was reminiscent of last year’s meme stock boom, when out-of-favor companies suddenly became darlings of smaller pockets.
But the stock fell back to earth after Ryan Cohen, the billionaire co-founder of online pet products retailer Chewy Inc. who bought nearly 10% of Bed Bath & Beyond last March, sold off all his shares.
The stock hovered near 30 cents in recent days. A year ago, the shares traded for around $17.
Bed Bath & Beyond said it expects to process returns and exchanges according to its regular policies until May 24 for items purchased before Sunday. It also expects gift cards, gift cards and loyalty certificates to be accepted through May 8. It will stop accepting coupons on Wednesday.
AP writer Bruce Shipkowski in Toms River, New Jersey contributed to this report.
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