By Joshua Burd
Bed Bath & Beyond is winding down its business after announcing Sunday that it has filed for Chapter 11 bankruptcy protection, while leaving the door open for a limited sale of its assets.
In a news release Sunday, the Union-based retailer said its 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as the company begins to close the physical locations. The home goods chain is also set to conduct a limited marketing process to solicit interest in one or more sales of some or all of its assets, noting that it was strategically managing inventory to preserve value.
It’s now the latest big-box retailer to succumb to the rise of e-commerce and the changing tastes of in-person shoppers. And its filing in the United States Bankruptcy Court for the District of New Jersey came after sharp revenue declines and attempts to cut costs, including previous store closures, as it moved to fund the business through a new stock offering.
On Sunday, Bed Bath & Beyond said it has received a commitment of some $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc., which it expects will provide the necessary liquidity to support operations during the Chapter 11 process.
“Millions of customers have trusted us through the most important milestones in their lives — from going to college to getting married, settling into a new home to having a baby,” said Sue Gove, CEO and president of Bed Bath & Beyond Inc. “Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and buybuy BABY. We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process. We will continue working diligently to maximize value for the benefit of all stakeholders.”
The retailer, which was founded in 1971, announced its liquidation plans while detailing the recent efforts to reverse its fortunes, citing actions to improve merchandise assortment, streamline its supply chain and optimize its store footprint. But its struggles continued despite a high-profile turnaround plan launched last year.
Bed Bath said that, through the filing of customary motions with the bankruptcy court, it intends to uphold its commitments to customers, employees and partners, including continued payment of employee wages and benefits, maintaining customer programs and honoring obligations to critical vendors. In the event of a successful sale of some or all of its assets, it said, the company will pivot from any store closings needed to implement a transaction.
Kirkland & Ellis LLP and Cole Schotz PC are serving as legal counsel, Lazard Frères & Co. LLC is serving as investment banker and AlixPartners LLP is serving as financial adviser, according to a news release. Bed Bath has also retained Hilco Merchant Resources LLC to assist with inventory sales.