Struggling retailer Bed Bath & Beyond has filed for Chapter 11 bankruptcy.
While stores and websites remain open for now, the company says it expects to close its remaining stores by the end of June. The company has also acquired a $240 million loan to help negotiate the chapter 11 process and support itself through the remainder of its operations. However, the company says it would abandon plans to close stores in the event of a successful purchase agreement.
Customers will have Sunday, Monday, and Tuesday to use up any remaining coupons, with clearance sales expected to follow in the next few months.
See Also: Bed Bath & Beyond Investing in Loyalty and Merchandising Efforts
Commenting on the news, Bed Bath & Beyond CEO Sue Gove said “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.”
Waves of Closures and Cash Lifelines
The announcement comes after a series of store closures and attempts by the retailer to avoid this bankruptcy filing. In February this year, the retailer shuttered 150 stores nationwide while also raising $1 billion in cash in a last-ditch effort to stay in business.
In January, the company posted disappointing third-quarter numbers, with both net sales and comparable digital sales falling 33% compared to the prior year. Suffering from low customer numbers and reduced levels of inventory availability, Bed Bath & Beyond also noted an adjusted operating loss of $225 million. Just $153.1 million in cash reportedly remained on their balance sheet at the time.
At the same time, the retailer shared a regulatory filing indicating there was “substantial doubt about the company’s ability to continue,” indicating that a bankruptcy filing might not be far off. Now, these fears have proven correct. During this period, the retailer’s stock dipped to its lowest point of below $2 a share.
In August 2022, the store drew up plans to shutter 150 lower-performing stores and cut about 20% of jobs across the corporate and supply chain workforce. The retailer has also witnessed the departure of its CEO Mark Tritton after just three years, resulting in the permanent appointment of interim CEO, Sue Gove.