NEW YORK — Bed Bath & Beyond — one of the original big-box retailers known for its endless offerings of sheets, towels and kitchen gadgets — has filed for bankruptcy protection following years of poor sales and losses and several failed turnaround plans.
In a filing Sunday in U.S. District Court in New Jersey, the home goods chain said it would begin to orderly cease operations while it seeks a buyer for all or some of its businesses. In the bankruptcy filing, the retailer said it would close all of its stores by June 30.
For now, the company’s 360 Bed Bath & Beyond stores and its 120 Bye Bye Baby sites and its websites are open to serve customers.
It lists assets and liabilities valued at between $1 billion and $10 billion. The move follows the company’s continued failure to secure funding.
In a statement, the Union, New Jersey-based company said it voluntarily “filed to effect the orderly winding-up of its businesses while conducting a limited marketing process to solicit interest in the sale of one or more of some or all of its assets.”
Closing stores could put thousands of jobs at risk. According to court filings, the company employs 14,000 workers. This is down significantly from 32,000 as of February 2022.
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“It’s the death of an icon. A lot of people grew up with it,” said Neil Sanders, managing director of Global Data Retail. “It’s a company in retail, but unfortunately being a company doesn’t protect you from financial problems.”
Founded in 1971, Bed Bath & Beyond has enjoyed its status as a big-box retailer for years, offering a wide selection of sheets, towels and gadgets unmatched by department store competitors. It was one of the first to introduce today’s home appliances to shoppers, like an air fryer or single-serve coffee maker, and its 15% to 20% off coupons were everywhere.
But for the past decade, Bed Bath & Beyond has struggled with weak sales, largely because of its cluttered assortments and lagging online strategy, making it difficult to compete with the likes of Target and Walmart, both of which have beefed up their home departments with high-end sheets and bedding. Meanwhile, online players like Wayfair have been wooing customers with affordable and trendy furniture and home decor.
In late 2019, Bed Bath & Beyond fired Target executive Mark Tritton to turn around sales. Tritton quickly cut back on coupons and began introducing store label brands at the expense of national labels, a strategy that proved disastrous for the retailer.
A pandemic shortly after his arrival forced the retailer to temporarily close its stores. It has not been able to use the health crisis to launch a successful online strategy like others, analysts said. While many retailers faced supply chain issues a year ago, Bed Bath was one of the most vulnerable, missing many of its top 200 best-selling products for the holiday 2021 season, including kitchen appliances and personal electronics.
The retailer axed Triton in June 2022 after two quarters of disastrous sales. In recent months, the company, under recently appointed chairman and CEO Sue Grove, has returned to its original strategy of focusing on national brands rather than pushing its own store labels. But due to the retailer’s financial problems, it is difficult for the company to have suppliers commit to delivering the goods.
Last holiday season, stores were missing many key items and it lost many customers, which continued to plague the retailer through the winter and spring seasons.
The bankruptcy filing comes as the company’s stock fell further as speculation about an impending bankruptcy filing increased. Its financial performance has also deteriorated. In late March, preliminary results showed a 40% to 50% decline in sales at stores open at least a year in the quarter ended February 25.
In a Securities and Exchange Commission filing in late March, the company said it planned to sell $300 million worth of stock to avoid a bankruptcy filing.
The home goods retailer has issued several warnings about a possible bankruptcy filing since earlier this year. In late January, it noted in a government filing that it had defaulted on its loans and lacked the funds to repay what it owed. The default forces the company to look at various alternatives, including restructuring its debt in bankruptcy court, the company said.
Bed Bath & Beyond joins a growing list of retailers that have filed for bankruptcy so far this year, including party supplies chain Party City and David’s Bridal. The bankruptcy could provide a window into what’s to come for the retail industry, given the changing landscape and mounting challenges in the U.S. economy.
In the depths of the pandemic, several retailers, including Neiman Marcus and JC Penney, filed for Chapter 11 bankruptcy. But in 2022, as shoppers got a reprieve from filing for retail bankruptcy, government stimulus money and savings piled up, giving up and helping retailers of all kinds rise. But with credit tightening and inflation stubborn, shoppers have tightened their wallets in recent months, making struggling retailers like Bed Bath & Beyond the hardest hit.
Bed Bath & Beyond has been trying to turn around its business and cut costs after previous management’s new strategies worsened sales declines. The company announced last August that it would close 150 of its namesake stores and cut its workforce by 20%. It also lined up more than $500 million in new financing.
Shares of Bed Bath & Beyond, which had been trading in distress, are also volatile. Over two weeks in August, it made a terrible run from $5.77 to $23.08. The trade was reminiscent of last year’s meme-stock craze, when out-of-favor companies suddenly became the darlings of small-pocketed investors.
Chewy Inc., an online pet products retailer, bought a roughly 10% stake in Bed Bath & Beyond last March. After its billionaire co-founder, Ryan Cohen, sold all his shares, the stock came back down to earth.
Shares were closing in on 30 cents in the past few days. A year ago, shares were trading at around $17.
Bed Bath & Beyond said it expects to process returns and exchanges according to its regular policies until May 24 for items purchased before Sunday. Gift Cards, Gift Certificates and Loyalty Certificates are expected to be accepted through May 8th. It will stop accepting coupons on Wednesday.
AP writer Bruce Shipkowski in Toms River, New Jersey contributed to this report.