By Rob Wile -
NBC News
Bed Bath & Beyond filed for bankruptcy on Sunday, ending a tumultuous chapter for the struggling home goods retailer.
The company had spent the past year making
a series of job cuts
and store closing announcements while simultaneously looking for financing options to stay afloat.
Bed Bath & Beyond said in a statement that “it and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey to implement an orderly liquidation of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets."
To help finance its bankruptcy operations, it said it had raised $240 million from investment firm Sixth Street Specialty Lending.
The retailer added that “
the 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open
and continue to serve customers as the company begins its efforts to effect closure of its retail stores.”
A Bed Bath & Beyond store in Paramus, New Jersey, the state where the company started in 1971. Ted Shaffrey / AP
The announcement came after Bloomberg reported on Wednesday that the company had renewed bankruptcy discussions, while The Wall Street Journal indicated that the company faced imminent default as its efforts to raise cash were proving unsuccessful and faced the possibility of bankruptcy.
Bed Bath & Beyond had apparently exhausted its options to avoid this moment, according to Neil Saunders, managing director of GlobalData Retail.
“They had some very specific problems and they made some really bad strategic mistakes,” Saunders said in an interview, “but the retail environment is much more pressured now.”
Ultimately,
a combination
of longstanding internal problems and economic headwinds made bankruptcy appear inevitable, Saunders said.
The company had gone through
three chief executives since 2019
, in response to two different sets of activist shareholders seeking to reform Bed Bath & Beyond's business.
The involvement of the most recent activist, GameStop president Ryan Cohen, breathed new life into the company's stock a year ago.
But just five months after naming three board members, Cohen sold his shares in the company, sending his stock plummeting in value.
Cohen did not respond to a request for comment from NBC News.
Bed Bath & Beyond's CFO was facing a class action lawsuit for fraud of more than $1,000
Sept.
6, 202201:51
Founded as Bed 'n Bath
by businessmen Warren Eisenberg and Leonard Feinstein in 1971, the first two stores opened in Springfield, New Jersey and Cedarhurst, New York.
The company went public in 1992 and, as of 2019, had a market value of $2.3 billion and employed 62,000 people.
In an interview with the Wall Street Journal published earlier this year, Eisenberg was blunt about what helped fuel the company's demise:
“We missed the boat on the Internet
,” he said.
