NEW YORK — Bed Bath & Beyond – one of the original big box retailers – has filed for bankruptcy protection, following years of dismal sales and losses and numerous failed turnaround plans.
The beleaguered home goods chain made the filing Sunday in U.S. District Court in New Jersey and said it will start an orderly wind down of its operations including eventually closing its stores, while seeking a buyer for all or some of its businesses. For now, its 360 Bed Bath & Beyond stores and its 120 Buy Buy Baby stores as well as its websites will remain open to serve customers.
It listed estimated assets and liabilities in the range of $1 billion and $10 billion. The move comes after the company failed to secure funds to stay afloat.
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In a statement, the company based in Union, New Jersey, said it voluntarily made the filing “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 store closings will put thousands of jobs at risk.
The company said it also intends to uphold commitments to customers, employees and partners. The retailer said it secured a commitment of roughly $240 million in financing from Sixth Street Specialty Lending, Inc. to allow it to keep operating during the bankruptcy process.
The filing comes as the company’s shares have tumbled even more as speculation of an impending bankruptcy filing increased. Its financial performance has also deteriorated. In late March, it noted that preliminary results showed anywhere from a 40% to 50% decline in sales at stores opened at least a year for the quarter ended Feb. 25.
The company also said in a Securities and Exchange Commission filing in late March that it planned to sell $300 million worth of shares to avoid bankruptcy filing.
The home goods retailer had been issuing several warnings about a potential bankruptcy filing since earlier this year. In late January, it noted in a government filing it was in default of its loans and didn’t have the funds to repay what it owes. The company had said the default is forcing the company to look at various alternatives including restructuring its debt in bankruptcy court.
Bed Bath & Beyond warned on Jan. 5 that it was considering various options including filing for bankruptcy and said that there was “substantial doubt” that it could stay in business. A week later, Bed Bath & Beyond posted a 33% drop in sales and a widening loss for the fiscal third quarter, ended Nov. 26, compared with the year-ago period. Sales at stores opened at least a year – a key indicator of a company’s health – dropped 32%.
Bed Bath & Beyond’s recently appointed president and CEO Sue Gove blamed the poor holiday performance on inventory constraints and reduced credit limits that resulted in shortages of merchandise on store shelves.
Bed Bath & Beyond joins a growing list of retailers that have filed for bankruptcy so far this year including party supplies chain Party City and David’s Bridal. And the bankruptcy could offer a window of what’s more to come, giving the changing landscape of the retail industry and the increasing challenges in the U.S. economy.
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During the depths of the pandemic, a number of retailers filed for Chapter 11 bankruptcy including Neiman Marcus and J.C. Penney. But in 2022, there was a respite in retail bankruptcy filings as shoppers, flush with government stimulus money and a pile of savings, spent with abandon, helping to lift all types of retailers. But as credit tightens and inflation remains stubborn, shoppers have been tightening 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 slash costs after previous management’s new strategies worsened a sales slump. The company announced last August it would close about 150 of its namesake stores and slash its workforce by 20%. It also lined up more than $500 million of new financing.
The company had 32,000 employees as of Feb. 26, 2022, but that number has come down since then as the retailer has slashed jobs.
AP Writer Bruce Shipkowski in Toms River, New Jersey contributed to this report.
