The Rise and Fall of Bed Bath & Beyond: A Look at the Iconic Retailer’s Bankruptcy Filing
After more than 50 years of business, Bed Bath & Beyond has filed for bankruptcy due to financial struggles.[0] The once unstoppable retailer, known for its blue-and-white paper coupons, will close its 360 Bed Bath & Beyond stores and 120 BuyBuy Baby stores.[1] The company had been losing both money and shoppers for months, struggling to restock shelves as suppliers and banks cut off its tab.[2] The bankruptcy filing revealed that Bed Bath & Beyond had $5.2 billion in debt and assets of just $4.4 billion.[3] During its bankruptcy, the company obtained a loan of $240 million to support its operations.[4]
Bed Bath & Beyond had been a crown jewel of the era of so-called “category killers” — chains that dominated a category of retail, such as Toys “R” Us, Circuit City, and Sports Authority. As shoppers opted for online options like Amazon, big specialty stores lost their appeal and ultimately went bankrupt. Similarly, those companies also faced the same fate.[4] However, Bed Bath & Beyond is largely responsible for its own undoing, according to suppliers, analysts, former managers, and employees. Over the course of nearly ten years, the executives in charge of the retail company gradually made choices that brought the business perilously close to financial ruin.[5]
The company's demise is sad in that Blockbustery sort of way, as a vestige of consumerist days gone by. The store where families bought a bathmat and a blender in 2004 could not keep up in the modern world, and now it will die, and its creditors will fight over what little is left after Bed Bath’s going-out-of-business sales.[6] The company tried to move away from coupons during the 2010s after they squeezed profit margins. They eroded Bed Bath & Beyond’s profit margins, hurt its brand image, and trained customers to only shop at stores if they had a coupon stashed away. Bed Bath & Beyond faced a challenge in selling their merchandise at full price as customers started to view their products as overpriced unless they had a coupon.
Bed Bath & Beyond became known for its pots and pans, towels, and bedding stacked from the floor to the ceiling at its cavernous stores. Millions of Americans wound up stashing their blue-and-white coupons away in their cars, closets, and basements.[4] To lure customers into its labyrinthine stores, Bed Bath & Beyond employed the use of coupons.[7] Once customers were inside, the company hoped they would wander around and impulse shop, buying linens, towels, pots, and everything else that caught their eye.[7]
Bed Bath & Beyond, which started with a pair of towel and bedding shops in New Jersey in 1971, managed to thrive even in the aftermath of the Great Recession.[2] It outlived its main rival, Linens ‘n Things, later buying BuyBuy Baby, the World Market, and online retailer One Kings Lane.[2] The chain had over 1,500 stores as recently as 2018.[2] However, the store faced mounting pressure from the competition of online retailers like Amazon, leading to the closure of hundreds of stores across the country and renovations of remaining ones in an effort to keep the brand alive for consumers who could find the same products online.[8]
The bankruptcy case of Bed Bath & Beyond has established Ryan Cohen and Jake Freeman as uncommon beneficiaries of the meme stock.[9] Less than eight months before the homeware retailer's bankruptcy filing on Sunday, the college student who was the champion of meme-stocks made a whopping $180 million in combined profits from the retailer's stock.[9]
Bed Bath & Beyond's bankruptcy filing 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.[5] Instead, Bed Bath & Beyond is largely responsible for its own undoing, according to suppliers, analysts, former managers, and employees. Over the course of nearly ten years, the executives in charge of the retail company gradually made choices that brought the business perilously close to financial ruin.[5] Warren Eisenberg, one of the founders of the chain, expressed regret for not taking advantage of the internet.[10]
0. “Customers flock to the last store open for Bed Bath & Beyond” WTAE Pittsburgh, 24 Apr. 2023, https://www.wtae.com/article/bed-bath-and-beyond-waterfront-bankruptcy-closing/43690137
1. “Bed Bath & Beyond in Wilmington to close as company enters bankruptcy” StarNewsOnline.com, 23 Apr. 2023, https://www.starnewsonline.com/story/news/local/2023/04/23/bed-bath-beyond-in-wilmington-to-close-as-st-files-for-bankruptcy-as-wilmington-store-to-close-soon/70143310007
2. “Bed Bath & the great Beyond: How the home goods giant went bankrupt” NPR, 24 Apr. 2023, https://www.npr.org/2023/04/24/1152070914/bed-bath-the-great-beyond-how-the-home-goods-giant-went-bankrupt
3. “Bed Bath & Beyond vows it can pull off a sale – here's what that means for shareholders” CNBC, 24 Apr. 2023, https://www.cnbc.com/2023/04/24/bed-bath-beyond-says-it-can-pull-off-a-sale.html
4. “Bed Bath & Beyond plans to liquidate all inventory and go out of business” CNN, 24 Apr. 2023, https://www.cnn.com/2023/04/23/business/bed-bath-beyond-bankruptcy/index.html
5. “Bed, Bath & Beyond plans to swiftly liquidate, close all stores” Crain's Chicago Business, 24 Apr. 2023, https://www.chicagobusiness.com/retail/bed-bath-beyond-plans-liquidate-close-all-stores
6. “Bed Bath and Beyond's bankruptcy was dumb, sad, and typical of our moment.” Slate, 24 Apr. 2023, https://slate.com/business/2023/04/bed-bath-beyond-bankrupt-stocks-retail-dumb.html
7. “How coupons backfired on Bed Bath & Beyond” East Idaho News, 24 Apr. 2023, https://www.eastidahonews.com/2023/04/how-coupons-backfired-on-bed-bath-beyond
8. “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
9. “Cohen, Freeman made $180 million on BBBY stock ahead of bankruptcy” Markets Insider, 24 Apr. 2023, https://markets.businessinsider.com/news/stocks/cohen-freeman-activist-college-student-bbby-stock-price-meme-bankruptcy-2023-4
10. “Bed Bath & Beyond Bankruptcy Blamed on Private Label Strategy” PYMNTS.com, 23 Apr. 2023, https://www.pymnts.com/news/retail/2023/report-bed-bath-beyond-private-label-strategy-fueled-demise
