Bed Bath & Beyond filed for Chapter 11 bankruptcy on Sunday. The once popular US retailer of home goods, Bed Bath & Beyond has in recent years struggled to keep pace with the growth of online shopping.
Since January, the retailer has been open about its issues after a poor holiday sales period. It has struggled since to manage its debt burden with additional financing. The company stated that it would continue to operate the nearly 400 Bed Bath & Beyond and 120 additional Buy Buy Baby stores while searching for buyers of “some or all” of its assets. The company plans to shut them down by the end June.
Sixth Street Partners is a firm that provides debtor-in possession financing of $240mn for bankruptcy proceedings.
In 1971, Bed Bath & Beyond was founded in New Jersey. It joined the so-called “big box” stores that offered a large selection of niche products at affordable prices. Bed Bath & Beyond reached its peak in 2010 with nearly 1,500 nationwide stores selling everything from toilet plungers and candies to linens.
In a press release, chief executive Sue Gove said that “millions of customers” had trusted us to help them through their most important life milestones – from college to marriage to settling in to a new house to having a child.
In the last year, the company was beset by crises. These included a Campaign from activist shareholder Ryan Cohen, The ousting its CEO, and Death By Suicide of its Chief Financial Officer.
Bed Bath & Beyond shares were shook for weeks by Cohen’s campaign, which culminated in the divestment last August of approximately 12 percent of company stock. The company implemented in the same month a turnaround plan that included job cuts and a reduced store footprint. This was backed by a loan from Sixth Street as well as a revolving facility led by JPMorgan.
Bed Bath & Beyond tried to avoid bankruptcy in February with a financing plan of $1.025bn to restructure its debts. This included the sale $255mn convertible preferred stock. The retailer’s shares reached a peak of almost $6 for a short time, but since then have fallen to penny stock levels.
The retailer’s Chapter 11 filings reveal that it has debts of $5.2 billion and assets of $4.4 billion.
The filing states that the company intends to close all brick-and-mortar stores by 30 June, with an aggregate net sale of $718mn expected during this period against $1.8bn in debt.