After Shopping Trend Shifts, ‘Bed, Bath & Beyond’ Files For Bankruptcy
On Sunday, Bed Bath & Beyond, a store that was known for providing a wide range of household items during the 1990s and 2000s, declared bankruptcy. The company posted a statement on its website expressing gratitude to its dedicated customers and announcing its difficult decision to start winding down operations. Presently, all of the company’s 360 Bed Bath & Beyond stores and 120 Buy Buy BABY stores will remain operational along with their websites, as the company has secured a $240 million loan to assist with funding during the bankruptcy process. However, store closing sales are scheduled to start on Wednesday, and Bed Bath & Beyond will be closing some of its stores, but it’s still unclear how many and what will happen to their 14,000 employees will depend on what comes next.
Filing for bankruptcy doesn’t always mean that a company is going out of business. Many large US corporations have used bankruptcy as a means of shedding debt and other expenses they could no longer afford. However, even if Bed Bath & Beyond emerges from bankruptcy, its future remains uncertain.
The company has expressed its intention to sell some or all of its business. If it succeeds in finding a buyer, it will stop store closures. But if it fails to do so, it’s likely that Bed Bath & Beyond will be completely liquidated and cease operations.
According to Neil Saunders, an analyst at GlobalData Retail, it’s possible that the company could emerge from bankruptcy as an online-only retailer. “Ultimately, if it emerges from bankruptcy at all, Bed Bath & Beyond will be a mere shadow of its former self,” he added.
Bed Bath & Beyond was once considered a flagship store of the “category killers” era, in which chains dominated a particular retail category, such as Toys “R” Us, Circuit City, and Sports Authority. As shoppers began favoring online alternatives like Amazon, these companies, too, ultimately filed for bankruptcy.
Bed Bath & Beyond filed for bankruptcy on Sunday with $5.2 billion in debt and assets worth only $4.4 billion. The company secured $240 million in financing to remain operational as it begins to close stores and wind down operations. While shoppers can return items bought before Wednesday until May 24, all sales after Wednesday will be final, and gift cards will no longer be accepted after May 8.
Bed Bath & Beyond, which began in 1971 as a small linen and bath store called Bed ‘n Bath, grew into a “category killer” chain of superstores that dominated the home goods retail industry. By 2000, the company had 241 stores and annual sales of $1.1 billion, and by 2009, it had opened its 1,000th store with annual sales of $7.8 billion.
Despite being an iconoclast that relied little on advertising, Bed Bath & Beyond was not immune to the changing retail landscape. The company had been shrinking to save money, closing around 400 locations this year, and laying off over 1,200 workers in New Jersey this month alone. It tried to raise funds by completing a complex stock offering backed by private equity group Hudson Bay Capital, but the deal was eventually terminated. The company’s fate now lies in finding a buyer, as it will likely be liquidated entirely and go out of business if one doesn’t come forward.