After a years long struggle, Bed Bath & Beyond filed for Chapter 11 bankruptcy relief on Sunday in the U.S. District Court in New Jersey and said its estimated assets and liabilities are between $1 billion to $10 billion
"We have made the difficult decision to begin winding down our operations," the company said on its website Sunday.
"Bed Bath & Beyond and buybuy BABY stores and websites are open and serving customers."
Bed Bath & Beyond was co-founded by Warren Eisenberg and Leonard Feinstein, who together opened two Bed ‘n Bath stores in 1971 in New York City suburbs.
The Union, New Jersey-based home goods retailer, which shot to popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, has seen demand drop off in recent years as its merchandising strategy to sell more store-branded products flopped.
As Reuters reports, last year’s moves to abandon that strategy, and to bring in more national brands that shoppers recognize, had not shown signs of working, with the company reporting a loss of about $393 million after sales plunged 33 percent for the quarter ending Nov. 26.
The retailer, which had some 955 stores and tens of thousands of employees as of a year ago, has undergone a desperate round of store closings as its business spiraled over the last several months.
"Bed Bath and Beyond has finally succumbed to the fact its business is broken and filed for bankruptcy," GlobalData retail analyst Neil Saunders said Sunday in a written analysis.
"While management refused to go down without a fight, and explored every option to avoid bankruptcy, they simply could not defy gravity forever.
The company has 360 Bed Bath & Beyond stores and 120 buybuy Baby locations left.
Bed Bath & Beyond said that it has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc., according to a separate statement.
As The Wall Street Journal reports, bankruptcy gives Bed Bath & Beyond the breathing room to conduct going-out-of-business sales at its physical stores and solicit interest from potential buyers for its remaining assets, such as its branding.
"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," CEO Sue Gove said in a statement.
"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."
If a bidder emerges for the business in bankruptcy, Bed Bath & Beyond said it would pivot away from its liquidation plans to pursue a sale.
If Bed Bath & Beyond ends up completely liquidating, it would be one of the largest going-out-of-business sales of the last 15 years - joining a club that includes Circuit City and Toys "R" Us.
