Bed Bath & Beyond Files for Bankruptcy Protection Amid Plunging Sales and Share Prices
Bed Bath & Beyond, the iconic home goods retailer, has filed for Chapter 11 bankruptcy protection after attempts to keep the company afloat failed. The move was widely expected after the company was unable to raise $300 million in capital amid plunging sales and share prices. The company estimates it has $5.2 billion in debt and assets of just $4.4 billion. Bed Bath & Beyond had been a dominant “category killer” that absorbed or outlived many early rivals, but the rise of online shopping and the popularity of Walmart and Amazon have taken a toll on the company.
The bankruptcy filing marks a historic ending for a 52-year-old company that helped define the 1990s and 2000s retail landscape. The brand was considered one of the tentpoles of the retail “category killers” — companies like Toys “R” Us, Circuit City, and Sports Authority that held near-monopolies over their product categories. All three of these chains eventually went bankrupt as mass-market retailers were unable to keep up with the online shopping boom from sites like Amazon.
In an effort to sustain the business by closing underperforming stores, Bed Bath & Beyond has revealed plans to shut down numerous locations over the past few months. Earlier this month, an additional 1,300 employees were let go, after a workforce reduction of 20% in August. As of February 2022, the organization had a workforce of approximately 32,000 individuals, among them 26,000 were employees working in stores.
Mark Tritton, a past executive at Target, assumed leadership in 2019 after receiving support from investors and devising a daring new plan. He reduced the use of coupons and inventory from national brands and instead focused on promoting Bed Bath & Beyond’s exclusive private-label brands. Tritton decided to produce more products in-house, which can help to cut costs if implemented effectively over time. However, the strategy ended up filling stores with too many unknown private-label products at the expense of well-known national brands.
The company said that for now, its 360 Bed Bath & Beyond and 120 BuyBuy Baby stores and websites will remain open, but that over time they would be closed. Through the filing of customary motions with the court, the company intends to uphold its commitments to customers, employees, and partners, including continued payment of employee wages and benefits, maintaining customer programs, and honoring obligations to critical vendors. Store closing sales will begin Wednesday at all locations. The option to shop online is still accessible.
Commenting on the bankruptcy filing, Sue Gove, President & CEO of Bed Bath & Beyond, said, “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. With great determination, our teams have put in a lot of effort to provide support and fortify our cherished brands, Bed Bath & Beyond and buybuy BABY. Throughout this process, we are resolute in our commitment to serve our associates, customers, partners, and the communities we serve, and we express our sincere gratitude for their valued support. We will continue working diligently to maximize value for the benefit of all stakeholders.”
The blue-and-white 20% off coupons were a Bed Bath & Beyond hallmark and became something of a pop culture symbol, with millions of Americans stashing them away in their cars, closets, and basements. The company said customers will have Sunday, Monday, and Tuesday to use their remaining 20%-off coupons. Starting Wednesday, the company will no longer be accepting them. Bed Bath & Beyond anticipates providing significant markdowns on its merchandise during its liquidation sales.
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