After several last-minute unsuccessful attempts to raise capital, Bed Bath & Beyond announced that they have filed for chapter 11 bankruptcy. All of the 480 company locations will soon begin to shut down as they are currently trying to sell out the remaining inventory and liquidate all company assets.
Overview
The higher-ups at Bed Bath & Beyond have been hinting around at a potential bankruptcy since the beginning of 2023. In January of 2023, the company issued a “going concern” notice. The notice laid out the company’s financial problems and it also highlighted that the company wouldn’t be able to cover its expenses after having a much weaker holiday shopping season than it anticipated. When the company closed its doors last week, each share was valued at around 29 cents. This is a dramatic decrease as last year Bed Bath and Beyond Shares were being traded for roughly $20.
Creditors & Other Debt
According to court documents that were filed during November, Bed Bath & Beyond had roughly $4.5 billion worth of assets and roughly $5.3 billion in total debt. The company also has a large list of creditors according to court reports. These creditors include some big names such as Pinterest, Blue Yonder, Keurig, and that’s just a few. The company’s biggest creditor is BNY Mellon, who has given Bed Bath & Beyond a $1.18 billion line of credit. In total, Bed Bath & Beyond has anywhere between, 25,0000-50,0000 creditors according to court documents. They also employ approximately 15,000 nonseasonal employees.
Hanging on By a Thread
As previously mentioned, Bed Bath & Beyond knew since January that they could be facing some serious financial struggles if the plans they initiated did not work. Several different efforts were made by the company to raise capital. One of these efforts included new stock offerings that they anticipated would raise $300 million. These projections were wrong, however, as the new stock offerings only bought in around $49 million. Another last-ditch effort made by the company was its partnership with liquidator Hilco Global. The agreement was made by the two companies as Bed Bath & Beyond thought this would help boost their inventory and keep their shelves stocked. This plan backfired, however, as the failure of the two companies to maintain a relationship resulted in low inventories for Bed Bath & Beyond. This hurt them even more during the holiday season when they barely had anything to keep the shelves stocked.
CEO Statement
After the bankruptcy announcement was made, Bed Bath & Beyond CEO Sue Gove said, “Millions of customers have trusted us through the most important milestones in their lives – from going to college to getting married, settling into a new home to having a baby. Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and buybuy BABY.”
Wrap Up
Bed Bath & Beyond is just the latest brick-and-mortar giant to close its doors. As the trend of online shopping continues to grow, many of these brick-and-mortar companies risk following in the footsteps of Bed Bath & Beyond if they don’t make the necessary changes to their business models.