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The backstory: Bed Bath & Beyond was once a huge household name for all home and bath needs in North America, but it's been having a tough time keeping up with the online shopping trend over the years. It's one of the biggest "category killers" – stores that dominate a particular retail category, similar to Toys "R" Us, Circuit City and others. But, with COVID and supply chain disruptions thrown into the mix, the slowed economy has really put a damper on things despite the company's 90s and 2000s heyday.
More recently: Last year, the company tried to cut costs by letting go of about 20% of its workforce and raising hundreds of millions in new financing. But, in January, it reported a massive quarterly loss and a 33% decline in sales, leading to concerns about possible bankruptcy. The company managed to raise US$360 million in February in an equity offering deal to pay off some debt. But then, it terminated that deal in March and announced plans to sell US$300 million worth of shares.
The development: Bed Bath & Beyond filed for bankruptcy over the weekend and is already starting a liquidation sale. The home goods retailer listed its assets and liabilities, writing that it has US$4.4 billion in assets and US$5.2 billion in debt. The company's CFO will step up as the chief restructuring officer during this bankruptcy process.
The retailer did manage to get a US$240 million loan to keep things going long enough to wind everything down. It's also looking to find a buyer for some or all of its business, but if it can't find one, it could be game over and time to join the ranks of other category killers that have recently gone under.
"Thank you to all of our loyal customers. We have made the difficult decision to begin winding down our operations," said Bed Bath & Beyond in a statement on the company's website Sunday morning.
"We appreciate that our customers have trusted us through the most important milestones in their lives," the company said in an email to shoppers. "Our stores are open and serving customers. However, we have initiated a process to wind down operations."
"Over the past month, we have been rebuilding our financial and operational positioning to execute our customer-focused turnaround plans," said Bed Bath & Beyond CEO Sue Gove in a statement.
"At first glance, it seems unlikely this will be enough for them to avoid an eventual bankruptcy," said Dennis Cantalupo, CEO of Pulse Ratings, a credit rating and consulting firm. "But they are certainly leaving no stone unturned. Additional capital will provide them some time, but they need to change the trajectory of operations to remain a viable retailer."