Bed Bath & Beyond filed for Chapter 11 bankruptcy protection on Sunday and said it plans to liquidate, adding that it will reverse course if it finds a last-minute buyer.
Why it matters: Bed Bath & Beyond has been in distress for years, having failed to reinvent itself in the digital age despite efforts to declutter its stores and remake its coupon strategy.
State of play: Famous for its towers of towels and bedding, wedding registries and myriad home goods, the retailer had some 955 stores and tens of thousands of employees as of a year ago.
- After launching a furious round of store closings as its business spiraled over the last several months, the company has 360 Bed Bath & Beyond stores and 120 buybuy Baby locations left.
Between the lines: If the company can't find a buyer, it will go out of business.
- That means selling off everything from inventory to store fixtures — and shutting down for good.
- If Bed Bath & Beyond ends up completely liquidating, it would be one of the largest going-out-of-business sales of the last 15 years — joining a club that includes Circuit City and Toys "R" Us.
- The company told customers in an email Sunday morning that it will honor coupons through April 26, accept gift cards through May 8 and process returns or exchanges until May 24 on products bought before April 23.
- As for wedding registries, "we expect to partner with an alternative platform where you will be able to transfer your data and complete your registry," the retailer said.
What they're saying: "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," CEO Sue Gove said 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."
Yes, but: Private equity firm Sycamore Partners had expressed interest in purchasing and continuing to operate the buybuy Baby brand, a source familiar with the situation told Axios.
What happened: Increased competition from digital threats like Amazon and big-box competitors like Walmart and Target ate into Bed Bath's customer base.
- And after former Target chief merchandising officer Mark Tritton took over in 2019 at the behest of activist investors, he pursued private-label products, decluttered stores and cut back on Bed Bath's famous 20%-off coupons.
- Those moves alienated the chain's most loyal shoppers, and Tritton was ousted in June 2022. He is now suing the company over his severance deal.
- Gove took over from Tritton and quickly moved to shore up the chain's inventory and close money-losing stores.
- But by February 2023 the company was on the precipice of bankruptcy before it arranged a complex financing deal with Hudson Bay Capital Management.
- That deal failed to provide a sustainable lifeline and the retailer's more recent attempt to raise $300 million through a stock offering didn't come to fruition.
The bottom line: Citing $5.2 billion in total liabilities and $4.4 billion in assets, Bed Bath & Beyond's business become increasingly tenuous in recent months — and now the company's faces an imminent existential crisis.
- "Bed Bath and Beyond has finally succumbed to the fact its business is broken and filed for bankruptcy," GlobalData retail analyst Neil Saunders said Sunday in a written analysis. "While management refused to go down without a fight, and explored every option to avoid bankruptcy, they simply could not defy gravity forever.
