Bed Bath & Beyond files for bankruptcy protection as it starts liquidation sale

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Bed Bath & Beyond, one of the largest retailers in the United States, has filed for Chapter 11 bankruptcy protection. The filing comes after the company failed to raise enough capital to sustain operations. The retailer has already started a liquidation sale.

Bed Bath & Beyond files for bankruptcy

The popularity of Bed Bath & Beyond exploded in the 1990s. The store became the ideal shopping location for couples creating their wedding registries and planning to start a family. However, in recent years, the popularity of this store has dwindled significantly.

The demand started dropping after a merchandising strategy adopted by the store to sell a wide range of store-branded products failed to succeed. Last year, the company planned to abandon this strategy and stock nationally recognized brands that shoppers identified with. However, this strategy failed to work,

In the quarter ending on November 26, the retailer reported a loss of around $393 million after the sales dropped by 33%. The New Jersey-based retailer filed for bankruptcy in a District of New Jersey court. In the bankruptcy filing, the company has listed its estimated assets and liabilities being between $1 billion and $10 billion.

A statement released by the company also said that it obtained a commitment of around $240 million worth of debtor-in-possession financing from Sixth Street Specialty Lending Inc. The company has already started a liquidation sale triggered by the bankruptcy filing.

Bed Bath & Beyond plans to use the Chapter 1 bankruptcy protection filing to conduct a limited sale of its product and market some or all of its existing assets. The company has also said that its 360 Bed Bath & Beyond and 120 BuyBuy Baby stores and websites would remain in operation and continue serving customers. The company has already started effecting the closure of retail locations.

Beleaguered retailer

Bed Bath & Beyond has been facing financial troubles since the start of the year. In January, the company raised concerns about its ability to sustain operations. The statement came months after the retailer revealed raising over $500 million in new financing. It also effected cost-cutting measures such as layoffs and 150 store closures.

In February, the retailer announced plans to raise around $1 billion by offering preferred stock and warrants to avoid filing for bankruptcy. The company raised $360 million from this deal to settle loan defaults and interest payments for senior notes.

Towards the end of March, the retailer halted plans to offer preferred stocks and warrants. Instead, it revealed plans to sell $300 million worth of shares. At the time, the company said it might be forced to file for bankruptcy if it failed to raise the needed funds.

In February, reports emerged about the Canadian operations of Bed Bath & Beyond being halted. The retailer operated 54 Bed Bath & Beyond stores in Canada and 1 BuyBuy Baby store. These stores are currently insolvent, indicating that the financial woes stretch beyond the US market.

About Ali Raza PRO INVESTOR

Ali is a professional journalist with experience in Web3 journalism and marketing. Ali holds a Master's degree in Finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of leading cryptocurrency publications including Capital.com, CryptoSlate, Securities.io, Invezz.com, Business2Community, BeinCrypto, and more.