Bed Bath & Beyond filed for bankruptcy Sunday, ending a tumultuous chapter for the struggling home goods retailer.
The company had spent the past year making a series of job cuts and store closure announcements as it simultaneously looked for financing options to stay afloat.
The company said in a statement that “it and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey 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.”
To help fund its operations in bankruptcy, it said that Bed Bath & Beyond had raised $240 million from the investment firm Sixth Street Specialty Lending.
The retailer added that the “360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as the company begins its efforts to effectuate the closure of its retail locations.”
The announcement came after Bloomberg reported Wednesday that the company had renewed bankruptcy discussions, while the Wall Street Journal reported the company was facing imminent default as its efforts to raise cash were proving unsuccessful and was facing the prospect of liquidation.
Bed Bath & Beyond had seemingly exhausted its options to stave off this moment, according to Neil Saunders, managing director of GlobalData Retail.
“They had some very specific problems and made some really bad strategic mistakes,” Saunders said in an interview, “But the retail environment is much more pressured now.”
Ultimately, a combination of long-running internal issues and economic headwinds made a bankruptcy filing seemingly inevitable, Saunders said.
The company had cycled through three CEOs since 2019 as it responded to two different sets of activist shareholders seeking to reform Bed Bath & Beyond’s business.
The involvement of the most recent activist, GameStop chairman Ryan Cohen, breathed new life into the company’s shares one year ago. But just five months after appointing three board members, Cohen sold his shares in the company, sending its value plummeting.
Cohen did not respond to a request for comment.
Founded as Bed ‘n Bath by entrepreneurs Warren Eisenberg and Leonard Feinstein in 1971, the first two stores opened in Springfield, New Jersey, and Cedarhurst, New York. The company went public in 1992 and, as late as 2019, it had a market value of $2.3 billion and employed 62,000 people.
In an interview with the Wall Street Journal published earlier this year, Eisenberg was blunt about what helped fuel the demise of the company:
“We missed the boat on the internet,” he said.
Source: | This article originally belongs to Nbcnews.com
