Lastsummer, Bed Bath & Beyond announced “strategic changes to strengthen its financial positioning, drive growth and better serve customers,” a plan that involved closing 150 stores in hopes of staving off bankruptcy.
It looks like the strategy hasn’t solved the troubled store’s problem. A few weeks ago, Bed Bath & Beyond announced that it would be cutting “an additional $80 million to $100 million across the company, including an unspecified number of layoffs.”
Three weeks later, they’re making another cost-cutting move.
In addition, the company said it would close five buybuy Baby stores and all locations of its beauty store brand, Harmon. The retailer said the new closures expand an ongoing program to close 150 of its lowest-performing stores. It had previously announced the shuttering of 62 stores in September, and 56 more in January.
Thirty states are impacted by the latest announcement. Florida will shed the most Bed Bath & Beyond stores in the latest wave with 11 stores closing, followed by California with 10. Harmon stores are mostly concentrated in New York and New Jersey.
The retailer said in its third quarter results report earlier this month that it had seen net sales drop 33% to $1.26 billion, and announced an expected $500 million in general annualized cost cuts.”
Peoplereported, “In a business update shared on January 5, the retail chain revealed it had suffered losses of over $385 million for the third quarter of 2022. Its sales for the same quarter were also down, totaling around $1.2 billion compared to $1.8 billion in the third quarter of 2021. CEO Sue Gove said in a statement at the time that the company had a “clear vision for the future” and had “strengthened [its] leadership team” to facilitate the “turnaround” needed.
A source familiar with the situation told Reuters that, as of Monday, the timing of a potential bankruptcy filing was in flux, as the company’s advisers remained searching for other potential options.
Investment firm Sixth Street is in talks to provide funding to Bed Bath & Beyond, sources told Reuters, after previously loaning the company $375 million last year.”
The store is a casualty of creative destruction and has failed to innovate to beat out its competition.
CNN wrote, “Last week, the company warned in a regulatory filing that it received a notice of default from its lender, JPMorgan Chase. The company said that “at this time, the company does not have sufficient resources to repay the amounts under the credit facilities and this will lead the company to consider all strategic alternatives, including restructuring its debt under the US Bankruptcy Code.”
Bed Bath and Beyond (BBBY) defaulted “on or around” January 13, according to the Securities and Exchange Commission filing. It could be forced to file for Chapter 11 bankruptcy reorganization due to its financial woes.
Founded in 1971, Bed Bath & Beyond became a staple for affordable home decor, kitchenware and college dorm room furniture. The retailer became known for its ubiquitous 20% off blue coupons, and cavernous stores with merchandise stacked high to the ceilings.
But the company struggled to make the transition to online shopping and fend off larger chains, such as Walmart and Target. Many shoppers switched to those competitors as the novelty of Bed Bath and Beyond’s coupons faded – consumers can find plenty of cheaper alternatives on Amazon and other online sites.”
To find out if a store near you is closing, Bed Bath & Beyond published a list of the latest closures near you. In 2013 the company’s stock priced in the high $70 range. Today it closed below $3.