Bed Bath & Beyond files for Chapter 11 bankruptcy

Bed Bath & Beyond Inc filed for Chapter 11 bankruptcy protection on Sunday after the home goods retailer failed to raise funds to stay afloat.

The Union, New Jersey-based home goods retailer has filed for bankruptcy in a New Jersey County court, listing both its estimated assets and liabilities as between $1 billion and $10 billion, according to a court filing.

Bed Bath & Beyond said it received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc, according to a separate statement.

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

In February, the embattled retailer planned to raise about $1 billion by offering preferred stock and warrants to avoid bankruptcy.

The company was able to raise $360 million from the complex deal, enabling it to pay loan defaults and interest payments on senior notes.

But Bed Bath ended the deal in late March, announcing plans to sell $300 million worth of stock, while also warning again that it may have to file for bankruptcy if it fails to secure the funds.

The company once thrived during the pandemic, commanding 1,500 stores in the US, before being hit by a tumultuous few years

Bed Bath & Beyond CFO Gustavo Arnal, 52, committed suicide in September 2022

The Union, New Jersey-based home goods retailer, which gained popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, has seen a decline in demand in recent years due to its merchandising strategy for more private label products flopped.

Last year’s moves to let go of that strategy and bring in more national brands that shoppers recognize showed no signs of working, with the company reporting a loss of about $393 million after sales fell 33% for the quarter that ended on November 26.

In January, the company expressed doubts about its ability to continue, just months after announcing more than $500 million in new funding, as well as job cuts and 150 store closures.

Arnal, right, jumped to his death from the 18th floor of Manhattan’s “Jenga” tower — two days after the company announced plans to lay off thousands of employees and close 150 stores

Distressed retailers often seek bankruptcy protection after the holiday season to take advantage of the cash buffer provided by recent sales.

In February, according to a lawsuit, Bed Bath & Beyond’s Canadian operations went bankrupt. The Canadian division, which has 54 Bed Bath & Beside stores and 11 buybuy BABY stores, is insolvent, according to the declaration on the website of consulting firm Alvarez & Marsal.

Bed Bath said in March it was seeking shareholder approval for a reverse stock split in the range of 1-for-5 to 1-for-10 and the board earlier in April urged shareholders to approve the split saying that if the plan fails, bankruptcy would be imminent.