The Hamilton Spectator
Bed Bath & Beyond shuts Canadian stores
Closings will result in job losses of more than 1,400
Bed Bath & Beyond has announced that it is closing all of its Canadian stores, resulting in the loss of just over 1,400 jobs across the country.
“The Bed Bath & Beyond Group has been in financial difficulty for the past several years, suffering significant net losses since 2018,” said a court filing posted Friday on the website of consultancy firm Alvarez & Marsal, which has been appointed monitor for the proceedings.
The company’s Canadian division will be closing 54 stores and 11 BuyBuy Baby stores, terminating 387 full-time and 1,038 part-time jobs, according to court documents, which also say Bed Bath & Beyond Canada cannot restructure its operations without support from its American parent company and its lenders.
Retail industry analyst Lisa Hutcheson said there had been previous “warning signals” and that the pioneering home goods chain neglected to change its retail strategy as consumer trends shifted during the pandemic and more users were driven to online shopping. Bed Bath & Beyond brick-andmortar stores are well known for their large warehouse-style shopping experience, which Hutcheson said did little to draw out customers.
“Bed Bath & Beyond didn’t pivot or change their strategy even though trends started to change,” Hutcheson said. “They’re trying to compete with the internet but their stores are boring and there’s nothing really bringing shoppers to the store versus shopping online.”
Indeed, the once-mighty retailer hasn’t been profitable for some time and had a net loss of $99.5 million for the nine-month period ending Nov. 26, 2022, the court documents show. As of Nov. 26, Bed Bath & Beyond Canada’s assets were valued at around $480.1 million, while its total liabilities were worth around $429.7 million, according to the documents.
U.S. parent company Bed Bath & Beyond Inc. has shuttered several of its stores countrywide and warned last month that it may need to file for bankruptcy protection as it was unable to pay back its loans. It recently raised about $1 billion through offerings of preferred stock and warrants, which it said will be used to pay off debt.
“As we continue to drive forward in our turnaround, and manage our business as efficiently as possible, Bed Bath & Beyond Inc. has made the decision to no longer support a Canadian operation,” the company said in an email to the Star.
Rising interest rates and inflation have led to a recent surge in the number of year-over-year insolvencies — the inability to pay down debt — filed by Canadian businesses. There were 3,402 business insolvencies last year, up 37 per cent from 2,480 in 2021, according to the Office of the Superintendent of Bankruptcy.
Business bankruptcies totalled 2,621 for the year, up from 1,942, while proposals filed by businesses amounted to 781, up from 538 in 2021. Throughout the pandemic, popular retail-chains and businesses across the country have been feeling the sting of decreasing footfall and increasing rent in Toronto, including fast-fashion giants H&M and the Gap, which have recently closed downtown store locations. Foot traffic has continued to fall significantly since pre-pandemic norms in 2020, as hybrid work persists and fewer residents travel to work downtown.
Hutcheson said retailers need to learn to adapt to this changing landscape. In a recent Retail Council of Canada survey, consumers indicated they wanted to return to in-person shopping, Hutcheson said, but if stores don’t give shoppers a reason to come in or offer a unique customer service experience, consumers will continue to shop online.
“What’s the reason for a consumer to go to Bed Bath & Beyond versus Ikea for the same products? Ikea has a restaurant and a kid’s play zone, for example,” Hutcheson said. “What makes a business different that would make me want to get in my car and have to drive there? I think that’s the lesson here.”