Bed Bath & Beyond files for bankruptcy after long fight for survival
Bed Bath & Beyond has filed for Chapter 11 bankruptcy protection after several failed attempts to raise capital of $300 million.
The firm said the filing is “to implement an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets.”
CEO Sue Gove pledged that the business “will continue working diligently to maximize value for the benefit of all stakeholders.”
The company’s collapse was obvious as it had given warning signals for months.
On Thursday, April 20, it filed for loan default with another warning for possible bankruptcy.
The firm has gone through a slow collapse after years of success.
Reasons for this include poor investments, patchy inventory, and waning customer demand.
Retail analyst Neil Saunders pointed to former CEO Mark Tritton’s unsuccessful approaches that “quickly alienated existing customers and failed to attract new ones.”
It includes setting up private labels and reducing the number of popular discount coupons.
The company will keep serving customer returns and exchanges bought before Sunday, April 23, until May 24 and will accept gift cards and certificates till May 8.
But coupons and Welcome Rewards discounts are only valid until April 26.
The retailer added that online orders placed before and after the filing will be honored.
Its 360 stores, websites, and 120 BuyBuy Baby locations “will remain open and continue serving customers as it begins its efforts to effectuate the closure of its retail locations.”
The financial crisis started in early January when it reported a $393 million loss for the quarter bringing its year-to-date fiscal losses to over $1.1 billion.
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Mr. Gove said then that Bed Bath & Beyond would cut costs by $80 million to $100 million and terminate an unspecified number of workers.
The firm later said it did not “have sufficient resources to repay” debts of $550 million from JP Morgan and $375 million from Sixth Street.
A week later, Bed Bath & Beyond reported a $28 million missed interest payment on its bonds and announced 87 store closures in addition to the 150 closed in August.
Source: The Washington Post