Bed Bath & Beyond Inc, the big-box retailer that for decades provided essential shopping for college dorms, wedding gifts and new homes, has decided to close all of its stores and liquidate inventory over the next two months after its turnaround failed.
The New Jersey-based company filed for bankruptcy on Sunday, a move that came months after saying it was weighing options to restructure debt, with “substantial doubt” about its ability to keep operating.
The filing allows the company to begin liquidating 360 Bed Bath & Beyond stores and 120 Buy Buy Baby shops immediately, although the company said it is also searching for a buyer for some or all of its assets.
Photo: AP
The shuttering of one of North America’s best-known home goods retailers puts the jobs of thousands of employees — and their retirement savings and severance pay — on the line.
The company employs about 14,000 people in the US, and among its initial requests in bankruptcy is to pay about US$76 million of employee wages and benefits.
The timing of the wind-down is swift, court documents showed.
Bed Bath & Beyond expects all sales at the remaining brick-and-mortar stores to be completed and the properties vacated by June 30.
“We appreciate that our customers have trusted us through the most important milestones in their lives,” the company said in an e-mail to shoppers. “Our stores are open and serving customers. However, we have initiated a process to wind down operations.”
Bed Bath & Beyond estimates that aggregate net proceeds from all sales could total US$718 million, according to court documents, and the retailer has about US$1.8 billion in total funded debt obligations.
The company in November last year estimated its assets at US$4.4 billion and debt at US$5.2 billion, and the number of creditors between 25,001 and 50,000, with BNY Mellon having the biggest unsecured claim of US$1.18 billion.
BNY Mellon is a trustee on three senior debt issues, according to a spokesperson for the firm.
The retailer told customers that as of tomorrow it would stop accepting coupons and membership discounts.
Despite the shut-down plan, the company also said it might “pivot away” from store closings if it draws suitors.
“Bed Bath & Beyond has pulled off long-shot transactions several times in the last six months, so nobody should think Bed Bath & Beyond will not be able to do so again,” the filing said.
Chief financial officer Holly Etlin is to serve as chief restructuring officer to manage the bankruptcy.
“Defying all expectations over the past four months, Bed Bath & Beyond secured credit agreement waivers and amendments, and was able to access the equity markets in February and March in a last-ditch effort to avoid bankruptcy,” Etlin said in a sworn statement.
“In-store sales continued to decline — with fourth-quarter sales falling by almost US$1 billion dollars year over year — and strained vendor credit relationships, which led to a lack of inventory,” Etlin said in the statement.
“Notwithstanding painstaking, creative and exhaustive efforts to right the ship along the way, Bed Bath & Beyond is simply unable to service its funded debt obligations while simultaneously supplying sufficient inventory to its store locations,” she said.
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