Bed Bath & Beyond has filed for Chapter 11 bankruptcy protection and will implement an orderly wind-down of its businesses while “conducting a limited marketing process” to find one or more buyers for some or all of its assets. The retailer has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending to provide the necessary liquidity to support operations during the Chapter 11 process.
All 360 Bed Bath & Beyond and 120 BuyBuy Baby stores and websites will remain open as the retailer begins it efforts to close all of its retail locations. The company will strategically manage its inventory during this period to preserve value and is prepared to pivot away from any store closures needed to implement a transaction in the wake of a successful sale.
Additionally, Bed Bath & Beyond intends to uphold its commitments to its customers, employees and partners, including continued payment of employee wages and benefits, maintaining customer programs and honoring obligations to critical vendors.
“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,” said Sue Gove, President and CEO of Bed Bath & Beyond in a statement. “Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and BuyBuy Baby. We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process. We will continue working diligently to maximize value for the benefit of all stakeholders.”
Bed Bath & Beyond has been struggling for years, and the pressures of the post-pandemic world proved more than it could take. Former CEO Mark Tritton attempted to improve its fortunes with a heavy private label push, but he was pushed out in June 2022 due to dismal quarterly results (including a 25% decline in sales during Q2 2022) and activist investor pressure. Tritton’s predecessor, Steven Temares, resigned in May 2019, also due to investor pressure, after the company’s share price dropped from $80 in January 2014 to $10 in December 2018.
Gove had plans to implement her own turnaround effort, including shifting away from private label, cutting hundreds of underperforming stores and laying off 20% of the retailer’s workforce across the corporate and supply chain divisions, but the savings were not enough to offset hemorrhaging sales and inventory overstock. In 2023, Bed Bath & Beyond made several last-ditch efforts to extend the company’s lifespan, including:
- Closing the remaining 50 Harmon Beauty stores;
- Seeking approval for a reverse stock split to bolster its share price;
- Securing investor backing for more than $1 billion in capital; and
- Laying off approximately 1,300 more employees at four New Jersey facilities.
These efforts were aimed at buying time to find a buyer, but no interested party materialized. It remains to be seen if a court-approved sales process will enable better results for the retailer.