On April 24, Bed Bath & Beyond, a popular home goods retailer known for its wide range of merchandise and ubiquitous 20% off coupons, filed for bankruptcy due to mounting debt and declining sales. The company posted a statement on its website, thanking its loyal customers for their support and announcing its plan to begin winding down operations.
Bed Bath & Beyond will start store-closing sales on April 28, while its 360 retail locations and 120 buybuy BABY stores will remain open for the time being. The company has not disclosed how many stores will be closed or what the future holds for its 14,000 employees. However, the company was able to secure a $240 million loan to assist with funding its operations throughout the bankruptcy process.
Although a bankruptcy filing doesn’t necessarily mean a company is going out of business, Bed Bath & Beyond’s future is uncertain. The company has said it intends to sell some or all of its business, but if it is unable to find a buyer, it may liquidate entirely and go out of business. It is also possible that the company could emerge from bankruptcy as an online-only retailer, according to Neil Saunders, an analyst at GlobalData Retail.
Saunders believes that Bed Bath & Beyond will be a shadow of its former self if it does emerge from bankruptcy. The company was once a crown jewel of the era of so-called “category killers” – chains that dominated a category of retail, such as Toys “R” Us, Circuit City, and Sports Authority. These companies ultimately filed for bankruptcy as shoppers turned away from huge specialty stores in favor of online options such as Amazon.
Bed Bath & Beyond was famous for selling name brands at cut-rate prices, attracting a wide range of customers to its cavernous stores stocked with pots and pans, towels, and bedding stacked from the floor to the ceiling. The retailer’s blue-and-white 20%-off coupons became a pop culture symbol, and millions of Americans held onto them in their cars, closets, and basements. The open-store layout encouraged impulse buying, with shoppers walking in to buy new dishes and leaving with pillows, towels, and other items. The company also had a strong baby and wedding registry business.
Despite investing in its online presence in recent years, Bed Bath & Beyond has been slow to respond to changes in shopping behavior and has struggled to entice customers who have moved on to Amazon, Target, and other chains. The rise of e-commerce has forced many traditional retailers to adapt, and Bed Bath & Beyond was no exception. Sales had declined for eight consecutive quarters before the pandemic, and in its bankruptcy filing, the company disclosed $5.2 billion in debt and $4.4 billion in assets. It secured $240 million in financing to remain in operation long enough to close its stores and wind down its operations, encouraging shoppers to take advantage of its discounted merchandise in the coming days.