Bed Bath & Beyond Files for Bankruptcy and Plans to Close Hundreds of Stores
After more than 50 years in business, Bed Bath & Beyond has filed for bankruptcy due to financial struggles.[0] The company has been warning about its future for months and has finally taken the difficult decision to begin winding down its operations. The brand plans to close its 360 Bed Bath & Beyond and 120 buybuy BABY stores, though it said it could “pivot away from any store closings” if it finds a buyer. This announcement is a low point for a home goods retailer that has been around for more than half a century, and it will open some valuable Austin-area real estate in prominent retail centers.[0]
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. Through the filing of customary motions with the Court, the company 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.[1] To support its operations during bankruptcy, the company obtained a loan worth $240 million.
Bed Bath & Beyond declared the closure of several hundred stores in recent months as an effort to sustain the business and close down less profitable locations. Earlier this month, an additional 1,300 employees were laid off, adding to the 20% reduction in the workforce that occurred in August.[2] The rise of online shopping and the popularity of Walmart have contributed to the company's downfall. Bed Bath & Beyond stated in its bankruptcy declaration that it possessed $4.4 billion in assets and a debt of $5.2 billion.[3]
Bed Bath & Beyond, established in 1971, previously held a dominant position in the market for household goods, offering an extensive range of products such as kitchenware, electrical appliances, home decor, and bathroom accessories.[1] Similar to other large retail chains, this store has encountered increasing competition from online retailers such as Amazon.[4] In an attempt to preserve the brand for customers who have access to the same products online, the company has shut down numerous stores nationwide and upgraded the ones that remain over the last few years.[4]
With support from investors and an ambitious new plan, Mark Tritton, a previous executive at Target, assumed control in 2019.[5] He scaled back coupons and inventory from national brands in favor of Bed Bath & Beyond's own private-label brands.[6] However, the strategy ended up filling stores with too many unknown private-label products at the expense of well-known national brands.[7]
Bed Bath & Beyond's demise is not, as some pundits have insisted, an example of the inevitable decline of brick-and-mortar retailers that struggle to compete against Amazon.com Inc.[7] According to suppliers, analysts, and former managers and employees, Bed Bath & Beyond is mostly to blame for its own downfall.[7] For nearly a decade, the retailer's leadership teams made decisions that pushed the company, little by little, toward the brink of financial collapse.[7]
After filing for Chapter 11 bankruptcy, the company declared the closure of all its remaining stores.[8] According to its filing in the United States Bankruptcy Court for the District of New Jersey, the company has stated that it will make an effort to sell its assets.[9] During the bankruptcy proceedings, the company intends to fund operations at its almost 500 stores using the $240 million in debtor-in-possession financing it has secured.
While there's no specific date for any store closure, the company's website stated store closing sales will start on Wednesday, April 27.[10] The company said customers will have Sunday, Monday, and Tuesday to use their remaining 20%-off coupons.[11] As of Wednesday, the company will no longer be accepting them.[6] Instead, Bed Bath & Beyond expects to offer “deep discounts” on its products as part of its going-out-of-business sales.[6]
In conclusion, Bed Bath & Beyond's bankruptcy filing is a low point for a retailer that has been in business for over 50 years. It's a reminder that brick-and-mortar retailers need to adapt to the changing retail landscape dominated by e-commerce and everything stores like Amazon. Bed Bath & Beyond is closing hundreds of stores in an effort to keep the business alive, but it may not be enough to save the brand.
0. “Bed Bath & Beyond bankruptcy, store closures to impact Austin real estate – Austin Business Journal” The Business Journals, 23 Apr. 2023, https://www.bizjournals.com/austin/news/2023/04/23/beth-bath-beyond-austin-impact-bankruptcy.html
1. “Bed Bath & Beyond Inc. Files Voluntary Chapter 11 Petitions” PR Newswire, 23 Apr. 2023, https://www.prnewswire.com/news-releases/bed-bath–beyond-inc-files-voluntary-chapter-11-petitions-301804829.html
2. “Bed Bath & Beyond Files For Bankruptcy And Plans To Close Its Retail Stores” Forbes, 23 Apr. 2023, https://www.forbes.com/sites/marisadellatto/2023/04/23/bed-bath–beyond-files-for-bankruptcy-and-plans-to-close-its-retail-stores/
3. “Bed Bath & Beyond announces it is closing for good” ROI-NJ.com, 23 Apr. 2023, https://www.roi-nj.com/2023/04/23/industry/retail/bed-bath-beyond-announces-it-is-closing-for-good/
4. “Bed Bath & Beyond to close stores in Colonie, other remaining locations” Times Union , 23 Apr. 2023, https://www.timesunion.com/business/article/bed-bath-beyond-close-store-colonie-remaining-17913519.php
5. “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
6. “Bed Bath & Beyond plans to liquidate all inventory and go out of business” CNN, 23 Apr. 2023, https://www.cnn.com/2023/04/23/business/bed-bath-beyond-bankruptcy/index.html
7. “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/
8. “Bed Bath & Beyond Throws in the Towel” Investopedia, 23 Apr. 2023, https://www.investopedia.com/bed-bath-and-beyond-bankruptcy-7484017
9. “Bed Bath & Beyond in Ch. 11 – Unsecured debts run to $Billions” Home Textiles Today, 23 Apr. 2023, https://www.hometextilestoday.com/retailers/bed-bath-beyond-in-ch-11-unsecured-debts-run-to-billions/
10. “Bed Bath & Beyond shutting down — What it means for NYC and NJ shoppers” Gothamist, 23 Apr. 2023, https://gothamist.com/news/bed-bath-and-beyond-shutting-down-what-it-means-for-nyc-nj-shoppers
11. “Opinion: Why I’ll miss Bed Bath & Beyond” CNN, 23 Apr. 2023, https://www.cnn.com/2023/04/23/opinions/bed-bath-and-beyond-bankruptcy-obeidallah/index.html
