Bed Bath & Beyond on Brink of Chapter 11

Bed Bath & Beyond (BBBY’s slow decline continues into a>=”https://www.theepochtimes.com/t-bankruptcy”>bankruptcy As the struggling retailer tries to stay afloat, the retailer announced another round in 87 store closings.

Following a list that included 150 closures of Bed Bath and Beyond stores last August, the Feb. 1 announcement about 87 store closings was made.

The new list will contain 5 buybuy Baby locations and all 49 Harmon beauty and health stores. There will also be several flagship-brand stores.

The home goods retailer admitted in January that net sales had fallen 33 percent, to $1.3 billion, for its latest quarter ending Nov. 26, compared with the same period a year ago, and that it was running out of options to avoid bankruptcy.

The company’s net loss grew to $393 million during the quarter, a 42 percent increase from a year ago.

Store closings and job cuts in 2022 aimed to cut the chain’s costs by about $500 million. The company claimed that it would save another $200million by eliminating certain corporate roles and adapting its supply chain. CNN reported.

“Although we moved quickly and effectively to change the assortment and other merchandising and marketing strategies, inventory was constrained and we did not achieve our goals,” Gove stated in a Jan. 10 statement.

According to the company, sales fell due to a lack of inventory from suppliers. It claimed it is trying to improve its merchandise selection, and replace some of the private brands with brand names.

“As we continue to work with our advisers to consider multiple paths, we are implementing actions to manage our business as efficiently as possible,” CNN spoke with a spokesperson from Bed Bath and Beyond.

“This store fleet reduction expands the company’s ongoing closure program.”

The Rise and Fall of a Home Goods Giant

Founded in 1971, the retailer became one the nation’s largest sellers of affordable home goods and décor. BBBY has been declining rapidly over the years, having reached a peak in 2017 of 1,552 locations.

After 2018, it started to lose ground to rival chains like Walmart and Target after it failed to make the transition to online shopping.

The retailer made its first cuts that year, but the arrival of the pandemic in 2020 hit the company hard. The retailer’s decision to temporarily close its stores caused sales to plummet, but its rivals were open.

The company lost 17% of its sales in 2020, and another 14% in 2021.

BBBY then decided to close around 200 of its name-brand stores in 2020 and dispose of some of its weaker brands, such as its Christmas Tree Shops.

In 2021, however, the retailer upset conservative customers by cancelling the deal. “My Pillow” product line, produced by conservative businessman Mike Lindell, after he criticized the outcome of the 2020 election.

BBBY’s total store square footage fell by 36 percent in the four fiscal years ending February 2022.

In February 2022, the company owned 953 stores. It announced plans to close additional stores in August and January this year.

Retailer Can’t Pay Off Its Debts

Bed Bath & Beyond is finally in default “on or around” Jan. 13, according the Securities and Exchange Commission.

It is close to filing Chapter 11 bankruptcy reorganization in order to escape its creditors crisis.

Om Jan. 26, the company warned in a regulatory filing that it received a notice of default from its lender, JPMorgan Chase. The shares plummeted more than 20% to $2.56 by the following day.

The retailer 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 U.S. Bankruptcy Code.”

BBBY, a company that is near insolvent, could liquidate inventory and spaces to help it raise the funds it needs to finance its operations during the reorganization process.

But store closings can also reduce operational costs but they also impact sales. Historically, few companies in this position have turned around their long-term financial problems through closings alone.

Bed Bath & Beyond has compiled a list with locations it recommends. Plans to close In the next weeks: