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Bed Bath & Beyond files for bankruptcy protection, begins liquidation sale

  • May 10, 2023

April 23 – Bed Bath & Beyond Inc (BBBY.O) filed for Chapter 11 bankruptcy protection on Sunday after the home goods retailer failed to secure funds to stay afloat, and has begun a liquidation sale.

The home goods retailer, which shot to popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, has seen demand drop off in recent years as its merchandising strategy to sell more store-branded products flopped.

Last year’s moves to abandon that strategy, and to bring in more national brands that shoppers recognize, had not shown signs of working, with the company reporting a loss of about $393 million after sales plunged 33% for the quarter ending Nov. 26.

The Union, New Jersey-based retailer filed for bankruptcy in a District of New Jersey court, listing both its estimated assets and liabilities in the range of $1 billion and $10 billion, according to a court filing.

The company said that it has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc, according to a statement.

While the retailer has begun a liquidation sale, it intends to use the Chapter 11 proceedings to conduct a limited sale and marketing process for some or all of its assets, according to the statement.

A person exits a Bed Bath & Beyond store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly

The company added that its 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as it starts efforts to effect the closure of its retail locations.

In January, the company raised doubts about its ability to continue as a going concern just months after it announced more than

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How Bed Bath & Beyond is hedging its bankruptcy bet

  • May 7, 2023

Bed Bath & Beyond (BBBY) is hedging its bankruptcy bets, simultaneously posturing for a wind down while also vying to stay in business.

The dual-track strategy emerged Sunday as the home goods retailer filed for protection of its assets under Chapter 11 of the US Bankruptcy Code.

A Chapter 11 filing typically helps financially distressed companies work out a plan with their creditors to reorganize debt and emerge as a viable entity. But Bed Bath & Beyond announced it would focus on liquidating assets, a path typically pursued as part of a Chapter 7 bankruptcy.

The failed housewares chain said the dual-track strategy was the best way to maximize value for stakeholders. A press release stated it had already initiated a liquidation sale, though would conduct a limited marketing process to solicit interest in some or all of its assets.

“In the event of a successful sale, the company will pivot away from any store closings needed to implement a transaction,” the company said.

Other distressed companies have taken a similar path. David’s Bridal, which filed for Chapter 11 protection on April 17, also elected for a dual-track sale-liquidation process. And retailer Toys R Us similarly chose the option for its 2017 Chapter 11 filing.

The dual-track, or “toggling,” strategy puts Bed Bath & Beyond in a more attractive position to potential bidders, said Elie Worenklein, a corporate restructuring attorney with Debevoise & Plimpton.

A customer walks into a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

A customer walks into a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

The stores can keep generating revenue from customers, while the company continues its marketing efforts to sell either all or a portion of its operations. Chapter 11 doesn’t require a company to shutter its doors.

In addition, Worenklein said, Chapter 11 permits

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