Bed Bath & Beyond, the US-based home goods retailer, filed for Chapter 11 bankruptcy on Sunday, as it struggles to stay afloat amid the coronavirus pandemic.[0] The company said that its 360 Bed Bath & Beyond and 120 BuyBuy Baby stores and websites would remain open for now, but over time they would be closed.[1] The retailer has been losing market share and reporting a decrease in quarterly sales, and the Covid-19 pandemic has only worsened its financial situation.[2] During the era of “category killers” Bed Bath & Beyond was considered a shining example of this retail phenomenon. These chains, like Toys “R” Us, Circuit City, and Sports Authority, dominated a specific category of retail.[3] Eventually, those corporations also declared bankruptcy due to customers shifting from large specialty stores to internet alternatives such as Amazon.[3]
Contrary to the claims of certain experts, the downfall of Bed Bath & Beyond does not signify the unavoidable downfall of physical retailers who find it difficult to rival Amazon.com Inc.[2] According to suppliers, analysts, and former managers and employees, Bed Bath & Beyond is mainly accountable for its own downfall.[2] Over the course of almost ten years, the management groups of the retailer gradually made choices that drove the company to the edge of economic ruin.[2]
Mark Tritton, a former executive at Target, assumed leadership in 2019, supported by investors and a daring new plan.[4] He reduced the usage of coupons and inventory of national brands and gave more preference to the private-label brands of Bed Bath & Beyond.[3] However, the merchandise shift failed to land with customers, and the strategy ended up filling stores with too many unknown private-label products at the expense of well-known national brands.[2]
To avoid bankruptcy, the struggling retailer had intended to generate approximately $1 billion in February by issuing preferred stock and warrants.[5] In late March, Bed Bath terminated the agreement and revealed intentions to vend $300 million worth of its shares. Additionally, the company issued another caution that it may need to file for bankruptcy if it is incapable of obtaining the necessary funds.[6]
To help fund its operations in bankruptcy, Bed Bath & Beyond said that it has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc.[7] The company estimated it had assets of $4.4 billion and total debt of $5.2 billion as of late November 2019, according to a court filing.[2] BNY Mellon holds the largest unsecured claim of $1.18 billion among the 25,001 to 50,000 creditors.[2] Holly Etlin, the chief financial officer of Bed Bath & Beyond, has been appointed as the chief restructuring officer to oversee the bankruptcy proceedings.[2]
Bed Bath & Beyond said that it expects customers will be able to use gift cards through May 8 and redeem Welcome Rewards until May 15.[8] The company announced its intention to market some or all of its business for sale.[3] In the event that a buyer is found, store closings will be ceased by Bed Bath & Beyond.[3] In the absence of a potential buyer, it is probable that Bed Bath & Beyond will face liquidation and ultimately cease operations.[3]
0. “Bed Bath & Beyond files for Chapter 11 bankruptcy” KFSN-TV, 23 Apr. 2023, https://abc30.com/bed-bath-and-beyond-files-for-chapter-11-bankruptcy/13173895
1. “Homeware giant Bed Bath & Beyond has filed for bankruptcy” NPR, 23 Apr. 2023, https://www.npr.org/2023/04/23/1147402660/bed-bath-beyond-bankruptcy
2. “Bed Bath & Beyond files for bankruptcy as turnaround fails” The Boston Globe, 23 Apr. 2023, https://www.bostonglobe.com/2023/04/23/business/bed-bath-beyond-files-bankruptcy-after-sales-decline/
3. “Bed Bath & Beyond files for bankruptcy” CNN, 23 Apr. 2023, https://www.cnn.com/2023/04/23/business/bed-bath-beyond-bankruptcy/index.html
4. “Bed Bath & Beyond files for Chapter 11 bankruptcy protection, will liquidate” Axios, 23 Apr. 2023, https://www.axios.com/2023/04/23/bed-bath-beyond-bankruptcy-chapter-11-liquidation
5. “Bed Bath & Beyond files for bankruptcy protection after long struggle, begins liquidation sale” CNA, 23 Apr. 2023, https://www.channelnewsasia.com/business/bed-bath-beyond-files-bankruptcy-protection-liabilities-3438146
6. “Bed Bath & Beyond files for bankruptcy protection after failed turnaround efforts” CNBC, 23 Apr. 2023, https://www.cnbc.com/2023/04/23/bed-bath-beyond-files-for-bankruptcy-protection.html
7. “Bed Bath & Beyond files for bankruptcy after years of declining sales” NBC News, 23 Apr. 2023, https://www.nbcnews.com/business/business-news/bed-bath-beyond-files-bankruptcy-going-out-of-business-whats-next-rcna80682
8. “Bed, Bath & Beyond files for bankruptcy, announces ‘winding down’ of operations” UPI News, 23 Apr. 2023, https://www.upi.com/Top_News/US/2023/04/23/bed-bath-beyond-files-bankruptcy/3441682257197/