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Bed Bath & Beyond, once a dominant home goods retailer, has filed for bankruptcy protection after months of struggling to regain its financial footing. The company, which also owns the BuyBuy Baby chain, has undergone a series of turnaround attempts that proved to be mistimed or ineffective. The COVID-19 pandemic further exacerbated the situation, causing the chain to miss out on the historic home-goods shopping boom while it was in the middle of an overhaul that involved replacing big name brands with more profitable private brands. This strategy, coupled with the industry-wide supply chain crisis, left top products like KitchenAid mixers missing from Bed Bath’s shelves.
The retailer’s website has long lagged behind its peers, and its shares rose and crashed as a meme stock on the news that activist investor Ryan Cohen invested in the company. Cohen shook up corporate leadership and then cashed out of his bet with a tidy profit. However, this was followed by hundreds of store closures, sweeping layoffs, and the shocking death of the company’s financial chief. Suppliers hesitated about sending more stuff to Bed Bath & Beyond, worried they wouldn’t get paid.
Bed Bath & Beyond’s sales fell substantially in the holiday-season quarter and the quarter before that. As a result, the company exhausted numerous last-ditch efforts to shore up financing, including store closures, job cuts, and several lifelines from banks and investors. The retailer previously cited “lower customer traffic and reduced levels of inventory availability” as it flagged “substantial doubt about the company’s ability to continue as a going concern.”
The company’s 360 Bed Bath & Beyond stores and 120 BuyBuy Baby stores remain open, but they will shutter over time. Starting on Wednesday, April 26, the chain will stop accepting coupons and discounts, and sales will be final. Gift cards are expected to stay valid through May 8. “We appreciate that our customers have trusted us through the most important milestones in their lives – from going to college, to getting married, to settling into a new home, to having a baby,” the company said in an email to shoppers on Sunday. “We have initiated a process to wind down operations.”
Bed Bath & Beyond was once a dominant “category killer” that absorbed or outlived many early rivals. As recently as 2018, the chain had over 1,500 stores. However, a few roller coaster years finally tipped the retailer into bankruptcy. Late last summer, the company had secured financing to propel it through the holiday shopping season. But lackluster sales led to waning enthusiasm from creditors in a trickier economic environment. In January, the chain defaulted on some of its loans, prompting those lenders to cut off its credit. The company began striking last-chance deals to stay afloat, selling more shares, asking landlords for breaks on rent, and even having another company pay for its merchandise.
While the news of Bed Bath & Beyond’s bankruptcy filing is undoubtedly sad, it’s worth noting that the company’s legacy will live on. For decades, it was a household name and a go-to destination for home goods shoppers. Its stores were filled with an array of products, from bedding and bath towels to kitchen appliances and home decor. Customers trusted the brand to provide high-quality merchandise at reasonable prices. While the company may be winding down its operations, its impact on the retail industry will be felt for years to come.