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

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 gained popularity in the 1[ads1]990s as a shopping destination for couples creating wedding registries and planning new babies, has seen demand fall in recent years as its sales strategy to sell more store-brand products flopped.

Last year’s move to abandon that strategy and bring in more national brands that buyers recognize had shown no signs of working, and the company reported a loss of about $393 million after sales plunged 33% for the quarter ended 26 .November.

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

The company said 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 proceeding to conduct a limited sale and marketing process for some or all of its assets, according to the 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 the process of closing its retail locations.

In January, the company raised doubts about its ability to continue operating just months after it announced more than $500 million in new financing, as well as job cuts and 150 store closings.

In February, the struggling retailer had planned to raise about $1 billion through a preferred stock and warrant offering to avoid bankruptcy.

The company was able to raise $360 million from the complex deal which helped it pay off defaulted loans and senior note interest payments.

But Bed Bath ended the deal in late March and announced plans to sell $300 million worth of the stock, warning it would have to file for bankruptcy if it couldn’t secure the funds.

In February, according to a lawsuit, Bed Bath & Beyond’s Canadian operations went out of business. The Canadian division, which operates 54 Bed Bath & Beyond stores and 11 buybuy BABY stores, is insolvent, documents posted on the website of consultancy Alvarez & Marsal showed.

Reporting by Granth Vanaik, Ananya Mariam Rajesh and Anirudh Saligrama in Bengaluru; Editing by Nick Zieminski

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