Bed Bath Beyond set to file for bankruptcy, lined up liquidators
NEW YORK Reuters -- Bed Bath Beyond Inc is preparing to seek bankruptcy protection as soon as this week and has lined up liquidators to close additional stores unless a last minute buyer emerges, four people familiar with the matter said on Monday.
The timing of a bankruptcy filing was in flux Monday evening, with the U.S. home goods retailer's advisers locked in meetings looking at any remaining options to avoid it, according to a person familiar with the matter.
Two people said that Bed Bath Beyond is negotiating a loan to help it navigate the bankruptcy proceedings, with investment firm Sixth Street in talks to provide some funding. The firm loaned Bed Bath Beyond $375 million last year.
Two people said that the chain, once considered a category killer in home goods like dinnerware and small appliances, has lined up liquidators who are ready to launch store closings that could be launched as soon as this weekend.
The talks are not public, and the people spoke on condition of anonymity.
The chain said it is closing 87 Bed Bath Beyond stores and five Buybuy BABY stores, in addition to 150 closures announced last year. It is shutting down Harmon's health and beauty discount chain.
They cautioned that a last minute buyer for the chain could emerge, or it could still ink a deal for its brands such as buybuy BABY. Prospective buyers wait until a company files for bankruptcy before agreeing to purchase assets in order to negotiate more favorable terms.
Bed Bath Beyond said in a statement to the Associated Press that it continued to work with its advisers to consider multiple paths but wouldn't comment on any bankruptcy planning.
The company has previously stated that it was exploring a range of options to address plunging sales, including selling assets, raising financing and declaring bankruptcy.
Bed Bath Beyond said last week it defaulted on a loan, bringing it closer to bankruptcy. Sources told Reuters that Bed Bath Beyond is considering skipping debt payments due on February 1, a move that distressed companies take to conserve cash.
Retailers in distress decide to file for bankruptcy protection after the holiday season to take advantage of the cash cushion provided by recent sales.
In March 2018, Toys R Us was liquidated in one of the largest failures of a specialty retailer.
Bed Bath Beyond had 953 locations, including buybuy BABY, as of February 2022.
Bed Bath Beyond had been considered a go-to shopping destination for couples making wedding registries and planning for new babies for years, but it lost its footing when it tried to expand into store brands.
The retailer's management has reversed course and aimed at bringing in national brands that the shoppers knew the chain for. The strategy hasn't gained traction with shoppers.
The company raised doubts about its ability to continue as a going concern earlier this month and said it would cut jobs.
Bed Bath Beyond reported a loss of $393 million after sales plunged 33% for the quarter ending November 26.