Bed Bath & Beyond to shutter all stores
Bed Bath & Beyond, the bigbox retailer that for decades provided essential shopping for college dorms, wedding gifts and new homes, will close all of its stores and liquidate inventory over the next two months after its turnaround failed.
The New Jersey-based company filed for Chapter 11 bankruptcy on Sunday, a move that came months after saying it was weighing options to restructure debt, with “substantial doubt” about its ability to keep operating.’
The filing will allow it to begin liquidating 360 Bed Bath &
Beyond stores and 120 Buy Buy Baby shops immediately, though the company said it’s also searching for a buyer for some or all of its assets.
The shuttering of one of America’s most well-known home goods retailers will put the jobs of thousands of employees — and their retirement savings and severance pay — on the line. The company currently employs about 14,000 people in the U.S. and Puerto Rico, and among its initial requests in bankruptcy is to pay about $76 million of employee wages and benefits.
The company’s shares are down about 92 percent this year.
The timing of the winddown will be swift, according to court documents. Bed Bath & Beyond expects all sales at the remaining brick-and-mortar stores to be completed and the properties vacated by June 30.
“We appreciate that our customers have trusted us through the most important milestones in their lives,” the company said in an email to shoppers. “Our stores are open and serving customers. However, we have initiated a process to wind down operations.”
Bed Bath & Beyond estimates that aggregate net proceeds from all sales will be approximately $718 million, according to court documents, and the retailer has about $1.8 billion in total funded debt obligations.
The company estimated it had assets of $4.4 billion and total debt of $5.2 billion as of late November, and the number of creditors is between 25,001 and 50,000, with BNY Mellon as trustee having the largest claim of $1.18 billion in unsecured bonds.
The retailer told customers it would stop accepting coupons and membership discounts on April 26.
The demise of Bed Bath & Beyond, which was founded in 1971 and grew into one of the country’s largest big-box chains, is not, as some pundits have insisted, an example of the inevitable decline of brick-and-mortar retailers that struggle to compete against Amazon.com. Instead, Bed Bath & Beyond is largely responsible for its own undoing, according to suppliers, analysts and former managers and employees. For nearly a decade, the retailer’s leadership teams made decisions that pushed the company, little by little, toward the brink of financial collapse.
In recent years, shoppers retreated and sales plummeted. Earlier this year, Bed Bath & Beyond was preparing to file for bankruptcy. But, to the astonishment of many suppliers and analysts, the retailer inked a complex eleventh-hour financing deal at the beginning of February to sell its shares to hedge fund Hudson Bay. The deal raised $360 million — far short of the $1 billion goal.