Bed Bath & Beyond Files for Bankruptcy Protection, Starts Liquidation Sale

Bed Bath & Beyond filed for bankruptcy, and its stores to remain open for customers.

On Sunday, Bed Bath & Beyond Inc filed for Chapter 11 bankruptcy protection after the home furnishings retailer failed to secure funds to stay afloat and started a liquidation sale.

The home furnishings retailer, which became popular in the 1990s as a go-to shopping destination for couples conducting wedding registries and planning a new baby, saw demand slump in recent years as its marketing strategy to sell more store-branded products failed.

A move last year to ditch the strategy and bring in more consumer-recognised national brands has not shown signs of working. The company reported a loss of about $393 million after sales plunged 33% in the quarter that ended November 26.

According to court documents, The Union, a New Jersey-based retailer, filed for bankruptcy in New Jersey District Court with estimated assets and liabilities of between $1 billion and $10 billion.

According to a statement, the company said it had secured about $240 million in debtor asset financing commitments from Sixth Street Specialty Lending Inc.

The retailer has already started liquidation sales. It intends to use the Chapter 11 procedures for a limited sales and marketing process for some or all of its assets.

The company added that its 360 Bed Bath & Beyond and 120 buybuy BABY stores and the website would remain open and continue to serve customers as it begins working to impact the closure of its retail locations.

In January, the company raised questions about its ability to continue as a going concern, months after announcing more than $500 million in new financing, layoffs and closing 150 stores.

In February, the struggling retailer planned to raise about $1 billion in a preferred stock offering and warrants to avoid bankruptcy.

The company raised $360 million from the complex deal, which helped it cover loan defaults and pay interest on senior notes.

But Bed Bath ended the deal in late March, announcing plans to sell $300 million worth of stock and warning that it may have to file for bankruptcy if it cannot secure funding.

According to a February court filing, Bed Bath & Beyond’s operations in Canada are closing. The Canadian division, which operates 54 Bed Bath & Beyond stores and 11 buybuy BABY stores, is now insolvent, according to documents posted on the website of consultancy Alvarez & Marsal.

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