New reports say that Bed Bath & Beyond is about to seek bankruptcy

Bed Bath & Beyond has been a go-to shopping destination for couples planning weddings and starting a family for years. However, after trying to expand into store brands, it lost its footing. The lack of stability, combined with the difficulties of the current economic situation around the world, has led the company to finally seek bankruptcy protection.

According to several sources familiar with the matter, the firm intends to file for bankruptcy at some point this week, and it has already lined up liquidators to shut down additional stores. The only thing that could save its business now is a last-minute buyer, although the possibility seems highly unlikely.

Bed Bath & Beyond is seeking funds for bankruptcy proceedings

According to four sources familiar with the company’s inner workings, the company spent its Monday evening in meetings, trying to explore any option that would allow it to avoid the bankruptcy filing. However, it appears that there are not many options left. Sources also shared that Bed Bath & Beyond started negotiating a loan that would allow it to navigate the bankruptcy proceedings with greater ease.

So far, the company has been discussing the possibility of a loan with an investment firm Sixth Street. This same company already helped Bed Bath & Beyond last year, by lending it $375 million.

Bed Bath & Beyond used to be a category killer in home goods, including small appliances, dinnerware, and more. However, now, it has lined up liquidators who are preparing store-closing sales. Two of the individuals from the company confirmed that the sales could be launched this weekend. Since the talks are not public, the sources insisted on anonymity.

The chain itself confirmed that it would close 87 of its stores, as well as five buybuy BABY stores. This comes in addition to 150 closures that were previously announced in 2022. The same will happen to the health and beauty discount chain, Harmon.

The company is running out of options

As mentioned, the sources did say that a possibility of a last-minute buyer for the chain could emerge, which would change the direction that the company is taking at this moment. Interested buyers have been known to wait for companies to file for bankruptcy first, before announcing that they will purchase assets in hopes of getting a better, cheaper deal.

Bed Bath & Beyond did not comment on this, but it did say that it has considered numerous plans, strategies, and potential paths to address plunging sales. These included raising funds, selling assets, and declaring bankruptcy, as the last option.

Last week, the company defaulted on a loan, which is a move that only brought it closer to bankruptcy filing. Insiders noted that BB&B is also considering skipping debt payments which are due tomorrow, February 1st. This is a common practice by companies that are trying to preserve any remaining cash.

And, with the holiday season over, the firm has likely done all the selling that it was expecting to do, so it makes sense for it to file for bankruptcy now.