Bed Bath & Beyond Inc, a leading US home goods chain with a history of 52 years, has filed for bankruptcy protection and commenced a liquidation sale on Sunday (local time). This company, which attracted attention as a ‘meme stock’ on Wall Street, has warned of the possibility of bankruptcy due to financial difficulties for several months.
Bed Bath & Beyond said it filed a Chapter 11 petition for bankruptcy protection in the Bankruptcy Court of New Jersey “for the orderly and phased closure of the business and for proceedings relating to the sale of some or all of its assets.” The company said on its website, “Thank you to our customers. We made the difficult decision to close the business.”
The company added that it will take out a $240 million turnaround company loan (DIP) from specialty finance firm Sixth Street Specialty Lending Inc to help the company operate during bankruptcy proceedings. As a result, 360 Bed Bath & Beyond stores and 120 subsidiary Bye Bye Baby stores can continue to operate for the time being.
Bed Bath & Beyond, which first opened its doors in New Jersey in 1971, survived the global financial crisis in 2008 and acquired several competitors, including Bye Bye Baby, and has grown into a leading U.S. household goods retail chain with more than 1,550 stores nationwide. However, in the aftermath of the rise of e-commerce companies led by Amazon, sales turned to a decline in 2019.
Co-founder Warren Eisenberg complained that it was “lost in the age of the Internet.” Here, the COVID-19 pandemic (a global pandemic) that has hit since 2020 has hit the business structure of Bed Bath & Beyond, which is centered on offline stores.
Driven into a liquidity crisis, Bed Bath & Beyond carried out aggressive restructuring, including large-scale store closures and job cuts, but this also did not have a great effect. Eventually, in early January of this year, it warned that it was considering bankruptcy along with options such as asset sales and other strategic deals. The company also received a notice of default from JP Morgan Chase after failing to pay interest on its debt.
According to the documents filed in the bankruptcy filing, Bed Bath & Beyond has $5.2 billion in debt and $4.4 billion in assets. Bed Bath & Beyond had to raise about $375 million before the 26th of this month to avoid bankruptcy, but ultimately failed.
Major foreign media, including Bloomberg News and the Wall Street Journal (WSJ), reported Bed Bath & Beyond’s plan to raise about $1 billion from a hedge fund in February to avoid bankruptcy, but the stock price fell below $1 per share. It is also said to have failed.
On the New York Stock Exchange, on the 21st, Bed Bath & Beyond (NASDAQ:BBBY) closed at 29 cents.
Also known as a representative meme stock, the company’s stock price soared through word of mouth through online communities during the Corona 19 pandemic. In 2021, it rose to $36.87 per share at one point.