(CTN News) – After losing shoppers and money for months, Bed Bath & Beyond has filed for bankruptcy protection.
After a series of mistimed or ineffective turnaround attempts, the company, which also owns the BuyBuy Baby chain, has struggled to regain its financial footing.
Throughout the years, millions of customers have trusted us with their most important milestones – from college to marriage to settling into a new home to having a child,” said Sue Gove, the company’s president and CEO.
We have committed incredible energy and time to supporting and strengthening our beloved banners, Bed Bath & Beyond and buybuy Baby.
Throughout this process, we remain steadfast in our commitment to serving our associates, customers, partners, and communities.”
For now, the company’s 360 Bed Bath & Beyond and 120 BuyBuy Baby stores and websites will remain open, but they will eventually shut down.
Following its first bankruptcy warning in January, the company has exhausted numerous last-ditch efforts to shore up financing, including store closings, job cuts, and several lifelines from banks and investors.
Bed Bath & Beyond previously flagged “substantial doubt about the company’s ability to continue as a going concern” because of “lower customer traffic and reduced levels of inventory availability.”
The preliminary sales report for the holiday season revealed a 40% to 50% decline from a year ago. Similar declines in sales were experienced in the quarter prior to that, down 32%.
A dominant “category killer” for many years, Bed Bath & Beyond eventually acquired or outlived most of its early rivals. Over 1,500 stores were operated by the chain as recently as 2018.
The company tipped into bankruptcy after a few roller coaster years.
In response to the news that activist investor Ryan Cohen invested in the company, its shares rose and crashed as a meme stock. In the end, he was able to cash out his bet with a tidy profit, shaking up the corporate leadership.
As a result, hundreds of stores were closed, thousands of employees were laid off, and the company’s financial chief tragically died. Bed Bath & Beyond suppliers were concerned that they would not receive payment for sending more merchandise.
In late summer of last year, the company secured financing that would allow it to carry it through the holiday shopping season.
In a challenging economic environment, creditors grew less enthusiastic about the company due to lackluster sales. Within a short period of time, Bed Bath & Beyond was having difficulty paying its bank and supplier obligations.
In January, the chain defaulted on several of its loans, which resulted in its credit being cut off. In order to remain afloat, the company began making last-chance deals, such as selling more shares, negotiating rent discounts with landlords and even paying its merchandise to another company.
During the first half of April, its stock price fell to 24 cents per share.
After opening its first store in New Jersey in the 1970s, Bed Bath & Beyond seemed unstoppable even during the Great Recession, outlasting its main rival, Linens ‘n Things, and later buying BuyBuy Baby, World Market, and online retailer One Kings Lane.