Bed Bath & Beyond (BBBY) filed for Chapter 11 bankruptcy protection on Sunday following years of declining sales that eventually doomed the home goods retailer. While the company’s Bed Bath & Beyond and buybuy BABY stores will remain open during the wind-down process, it has received $240 million in debtor-in-possession financing from Sixth Street. CEO Sue Gove expressed appreciation for their customers, associates, partners, and communities, and committed to serving them throughout this process.
The retailer had been exploring “strategic alternatives” since January, but its first funding partner bailed after less than two months. In the most recent quarter, Bed Bath & Beyond reported a 33% drop in sales, with adjusted losses totaling $225 million. The company’s shares have lost 98% over the last year, and its sales fell from $12.3 billion in 2017 to just $7.9 billion in 2021, the lowest annual tally since 2009.
Bed Bath & Beyond’s decline was accelerated by the pandemic as customers increasingly turned to online retailers such as Amazon and Wayfair. While private labels have become a significant part of the growth story for large retailers like Target, Macy’s, and Walmart, Bed Bath & Beyond fell behind.
The company had announced plans for a shareholder vote on a reverse stock split in May 2022 to shore up its liquidity and come into compliance with Nasdaq listing rules after its stock fell below $1 per share. However, the company lost over $1 billion through the first three quarters of 2022, and the provisions of the funding deal with Hudson Bay Capital required Bed Bath & Beyond’s stock price to remain above certain levels. As the stock price dropped from above $5 per share in February to less than $1 per share in late March, Hudson Bay’s funding deal ended.
Bed Bath & Beyond stock closed at $0.29 ahead of the company’s bankruptcy filing, down from its all-time high of roughly $80 per share in December 2013. Despite investor Ryan Cohen’s taking a 9.8% stake in the company in March 2022, leading to a surge in share prices, Bed Bath & Beyond could not avoid its decline.
