Bed Bath & Beyond files for bankruptcy
Bed Bath & Beyond Inc. has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the District of New Jersey.
In an April 23 statement issued by the home decor and home goods retailer, Bed Bath & Beyond said it plans “to implement an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets.”
The retailer reported that it has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending, Inc.
Following court approval, the company expects the financing to provide the necessary liquidity to support operations during the Chapter 11 process.
The company's 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as the company begins its efforts to effectuate the closure of its retail locations.
Last year, the company initiated a turnaround plan to reset its business strategy and operations. But the plan wasn’t enough. Actions had been underway to improve merchandise assortment, streamline supply chain, and optimize its store footprint, Bed Bath & Beyond said.
In August 2022, Bed Bath & Beyond reported that it had secured more than $500 million in new financing ahead of the holiday selling season. The financing included a $375 million loan through Sixth Street Partners and the newly expanded $1.13 billion asset-backed revolving credit facility.
Prior to that, CEO Mark Tritton and chief merchandising officer Joe Hartsig were ousted by the board following a dismal first quarter.
In a filing with the Securities & Exchange Commission earlier this year, the sinking retailer warned for the second time in less than a month that it was considering filing for bankruptcy. The filing came days after the company received a delisting warning from Nasdaq.
On Jan. 10, Bed Bath & Beyond reported that its third quarter sales declined 33% to $1.23 billion as comp sales fell 32%. The retailer also reported a net loss of $393 million for the period while noting it was completing the closing of 150 stores by the end of fiscal 2022.
Bed Bath & Beyond has closed hundreds of locations in the past two years. (Click here to see 2022 and 2023 store closings).
As of Last November, the retailer had a total of 949 stores, including 762 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 137 buybuy Baby stores, and 50 stores under the names Harmon, Harmon Face Values or Face Value.
"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,” Sue Gove, president and CEO of Bed Bath & Beyond Inc. said in a company-issued press release. “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."
While proceeding through the bankruptcy process, Bed Bath & Beyond said that it 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.”
A liquidation sale has commenced with Bed Bath & Beyond using the Chapter 11 proceedings to conduct a limited sale and marketing process for “some or all of its assets.”
The company has filed motions with the court seeking authority to market Bed Bath & Beyond and buybuy BABY as part of an auction pursuant to section 363 of the Bankruptcy Code.
Alongside these efforts, the company said that it is strategically managing inventory to preserve value. In the event of a successful sale, the company will pivot away from any store closings needed to implement a transaction.
Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal counsel, Lazard Frères & Co. LLC is serving as investment banker, and AlixPartners LLP is serving as financial advisor. Bed Bath & Beyond Inc. has retained Hilco Merchant Resources LLC to assist with inventory sales.
