The COVID-19 pandemic wasn't kind to retail businesses, including major chain Bed Bath & Beyond. Tack on inflation and changes in consumer spending habits and you've got a retailer gasping for air. If we rewind back to January 2021, Bed Bath & Beyond had more than 1,000 retail stores open across the U.S. As of April 2023, however, Bed Bath & Beyond was in a much rougher state. The company is entering bankruptcy proceedings with only 360 stores left standing.
So, is Bed Bath & Beyond closing?
According to Bed Bath & Beyond's Q3 financial report, which released on Jan. 10, 2023, the company watched its nets sales decline by 33 percent. But declining sales wasn't a new issue for the retailer. Given its current financial state combined with its Chapter 11 bankruptcy filing, both investors and consumers question the fate of Bed Bath & Beyond. Keep reading for details on what Bed Bath & Beyond wants to do with its remaining 360 stores.
Why did Bed Bath & Beyond file for bankruptcy?
Bed Bath & Beyond has had multiple run ins with bankruptcy. In February 2023, it dodged filing yet again after attempting to raise "$1 billion through preferred stock," Fox Business reported. It also closed more retail locations, including some in Canada, and its Harmon stores.
Tyler Dischinger, a counsel in Buchanan’s bankruptcy practice group in Pittsburgh, called the move a "Hail Mary" for the home goods retailer during an interview with Fox News.
While Dischinger initially thought that it would be "less likely" for Bed Bath & Beyond to file for bankruptcy by the end of the first quarter" of 2023, giving it time to "get on good terms with lenders while continuing to shrink their brick-and-mortar footprint," it happened anyway.
In April 2023, Fox News disclosed that Bed Bath & Beyond had only raised $408 million of the $1 billion it proposed it would obtain. Between declining sales and a lack of capital, Bed Bath & Beyond ultimately decided to file for bankruptcy in the United States Bankruptcy Court for the District of New Jersey on April 23, 2023.
In a company press release, the retailer noted that it would continue to keep its remaining 360 stores open in addition to the 120 buybuy BABY stores it has operating while it navigates the bankruptcy proceedings.
However, the retailer is looking to "wind down its businesses" as it looks to sell "some or all of its assets." If successful, some Bed Bath & Beyond stores may stay open.
Is Bed Bath & Beyond being sued?
The complaint, which was filed in New York State court in Manhattan, reportedly states that Bed Bath & Beyond failed to provide Tritton with the $6,765,000 severance package it agreed to.
Then, in April 2023, a former store manager also filed suit against Bed Bath & Beyond after the retailer permanently closed its 50 Harmon stores. The plaintiff, Michael Palmeri, alleges that the retailer “failed to give proper notice of mass layoffs” related to store closures, Retail Dive reported.
Palmeri is seeking damages “equal to the sum of wages, salaries, bonuses, vacation pay, pension, and health benefits for 60 days, in addition to severance pay equal to one week of pay for each full year of employment.”
How many stores has Bed Bath & Beyond closed?
In mid-2020, Bed Bath & Beyond announced a clear-laid plan to close 200 retail stores over the course of two years. By the end of 2020, 63 of those stores had made their final sale.
While the company is headquartered in New Jersey, the Bed Bath & Beyond store closures range from Alabama to Washington.
According to a published list of store closures, the retailer has already closed roughly 288, though more are likely to come as the company proceeds through the bankruptcy process.
Why couldn't Bed Bath & Beyond avoid bankruptcy?
Although Bed Bath & Beyond explored every avenue possible to tactfully avoid bankruptcy, including shifting how it does business, it wasn't enough.
During the time Tritton served as CEO in 2019, he worked tirelessly to slim the workforce, storefronts, and overall expenses. His approach may have been necessary considering that the company lost 80 percent of its value from 2015 to 2019.
Sadly, the efforts weren't enough to bring the retailer back above water.
Is Bed Bath & Beyond going out of business?
Bed Bath & Beyond isn't going out of business yet. Depending on the outcome of the Chapter 11 bankruptcy filing, the company could emerge under a new owner, allowing it to potentially keep some of its stores open.