Bed Bath & Beyond has removed its big blue signs and begun closing hundreds of stores nationwide. The struggling home goods retailer operates Buybuy Baby and Harmon beauty chains; together, these locations span across America. Bed Bath & Beyond announced they would close 62 of their own brand locations nationwide as soon as this month.
This company had attempted to raise funds through stock offerings but ultimately fell short, leading them to file for bankruptcy on Sunday as an attempt at saving their business failed.
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It is a family-owned business
Bed Bath & Beyond started its story as two towel-and-bedding stores in 1971 in New Jersey. Since then, they have expanded throughout the Great Recession, outliving rival Linens ‘N Things while purchasing BuyBuy Baby, World Market, and One Kings Lane as they become available. By the 1990s, they had established themselves as category killers – offering high inventory at low prices in specific product areas, like home goods. By doing this, they dominated their respective industries.
In recent years, however, the company has struggled with sales decline and an online shopping trend shift towards lower costs and sophisticated consumer research tools offered through e-commerce platforms. They tried various tactics to improve profitability, like cutting costs and closing stores – their latest move may even end in liquidation if bankruptcy proceedings proceed as planned.
Bed Bath & Beyond’s bankruptcy filing details its plan to sell off assets to raise enough funds to repay its debts, including closing over 100 stores while cutting corporate and supply chain staff by approximately 20%. Furthermore, they’ve announced they’ll stop offering popular 20%-off coupons and discounts; customers are still welcome to shop online or use its apps; additionally, their return policy remains in effect until May 24.
This news follows several difficulties experienced by the company, such as declining sales and profit expectations reversals, along with its stock price declines. According to their filing, their assets and liabilities total between $1 billion and $10 billion.
Soon, a new board of directors is expected to be appointed. Members will bring expertise from across various areas- retail operations, supply chain management, marketing, and e-commerce – and will work toward finding ways to guide the company on its rocky journey.
Uncertainty remains on how exactly the new board will alter the company’s course, but one thing is evident: It won’t be easy. Over 200 stores have already closed, with another 150 scheduled by 2023.
It is a chain store.
Bed Bath and Beyond’s bankruptcy filing reflects a dramatic transformation in US retail over the past several years. Stores have been closing, and others are reducing their physical footprint; customers migrated online instead, providing more convenience and selections than brick-and-mortar shops could ever offer. Bed Bath Beyond struggled to adapt, losing market share to competitors who provided a more effortless shopping experience and offered top brands like Ralph Lauren towels and Calphalon pans at much more reasonable prices than they could.
Beginning in the mid-2000s, when they failed to adapt quickly enough to e-commerce trends, the company’s downfall started in earnest, according to its bankruptcy filing. Other mistakes included an excessively bureaucratic management structure with too many layers and unwillingness to compete directly against direct competitors; additionally, they failed to attract young shoppers as customers.
Bed Bath and Beyond’s latest chapter began earlier this year when they announced dozens of store closures and mass layoffs. New York City will see Bed Bath & Beyond close its stores on the Upper West Side and Kips Bay; Chelsea remains their sole remaining Manhattan location; no indication has been provided regarding whether any will reopen.
To save the company, executives arranged for a $1 billion round of equity funding from Hudson Bay Capital Management; however, due to being unable to meet stock-price minimums, the deal was canceled and failed to achieve a debt service coverage ratio under existing plans.
Bed Bath and Beyond’s bankruptcy filing outlined various options to remain profitable, such as selling itself or its assets. Furthermore, they still intend to sell online and in their stores; customers who purchased items online can redeem gift cards or merchandise credits until Monday; returns will still be accepted until May 24. Thousands of jobs could be put at stake with this announcement and retirement savings/severance pay is also at risk; most stores under 50,000 square feet are attractive to potential buyers, given today’s trend toward smaller stores.
It is a discount store.
Bed Bath & Beyond and Buybuy Baby are closing dozens of stores nationwide, including many in New York City. The retailer filed for Chapter 11 protection on April 23 and stated it would start liquidation sales soon – though they will continue paying employee wages and benefits, managing customer programs, honoring vendor obligations, and keeping both websites active, the company noted.
This company has been struggling to compete with online retailers and keep up with consumers’ changing shopping habits, with profits declining and no buyers emerging for its shares trading well below book value. Through Chapter 11 filing, it can restructure debts and dispose of assets more efficiently.
After the announcement, stock prices briefly surged upward. But they remain down more than 20% this year due to higher consumer costs and lack of innovation; plus, the company recently replaced its CEO resulting in its stock taking a steeper decline than anticipated.
Bed Bath & Beyond will begin their store closing sales on Wednesday with steep discounts and expects to accept returns and exchanges until May 24. They will continue honoring gift cards, merchandise credits, and customer Welcome Rewards until May 15. However, they won’t be awarded on subsequent purchases; customers will still have access to their registry data through another website.
No word yet on whether the company can find a buyer to save them; if that occurs, store closures could be postponed; otherwise, they’ll likely end up liquidating all their stores and shutting down.
Starting as a mail-order catalog business in 1971, this chain relied heavily on coupons to drive traffic and increase sales. But as online shopping became more popular, their coupons became less relevant; furthermore, market share to competitors like Target and Amazon saw them lose ground while they failed to turn around their fortunes despite their best efforts.
It is a home improvement store
Bed Bath & Beyond’s announcement to close numerous locations nationwide last month left shoppers uncertain whether their local stores would survive. A few weeks later, however, the struggling home goods retailer revealed it would close 150 “lower-producing” locations – equivalent to approximately 20% of its stores – and reduce corporate and supply chain jobs by around 20%.
The company is also exploring other options, including the possible sale of its assets or the company itself. Recently it reached out to interested potential buyers through company filings; should a deal be struck, some stores could continue operating under the buy Baby name if such can be worked out. Store closing sales will start on April 26 and continue until May 24, when customers may still purchase online or in stores with Welcome Rewards program honoring.
The broader reversal of brick-and-mortar shopping has battered the retail giant’s once mighty brand. The stock dropped precipitously when they defaulted on loans and warned of possible bankruptcy; their best efforts to reverse course proved futile as they failed to find funds necessary for continued operation.
Bed Bath & Beyond opened its business doors in 1971 with two towel and bedding stores in New Jersey. Since then, its growth has outshone its main competitor, Linens ‘n Things, through acquisitions such as BuyBuy Baby and Cost Plus World Market. Celebrities often sing the praises of Bed Bath & Beyond on talk shows; its wide selection of merchandise often became plot points in movies or TV shows featuring its use as a merchandise source.
In early 2022, its share price hovered near $23, and it was seen as a top candidate to acquire another discount retailer. But the financial crisis soon escalated: they exhausted credit lines and other lifelines to seek rent reduction; CEO Mark Tritton and CFO Joe Hartsig were fired; shares now worth less than $1 per share.