Troubled Bed Bath & Beyond Shuttering 87 More Stores as Possible Bankruptcy Looms

A person exits a Bed Bath & Beyond store in Manhattan, New York, on June 29, 2022. Andrew Kelly/Reuters

Troubled home goods retailer Bed Bath & Beyond is shutting an additional 87 stores as its financial woes continue, a spokesperson has confirmed.

A company spokesperson told The Epoch Times in an emailed statement: “This store fleet reduction expands the Company’s ongoing closure program of approximately 150 lower-producing Bed Bath & Beyond banner stores. We will update all stakeholders on our plans as they develop and finalize.”

The company will also be shuttering five Buybuy Baby stores, as well as all of its Harmon beauty locations, the spokesperson confirmed.

Bed Bath & Beyond President and CEO, Sue Gove, told investors earlier this month that store closures will allow the company to “allocate resources according to customer demand” and become more “streamlined” as it adopts a “more focused infrastructure that reflects our current business.”

The latest store closures—the locations of which were not disclosed—bring the total number of closures across the United States to over 200. In total, Bed Bath & Beyond has around 708 stores.

Bed Bath & Beyond was founded in 1971 in New Jersey by Warren Eisenberg and Leonard Feinstein and was once one of the leading home goods retailers in the United States.

However, the retailer has been hit with a series of issues in recent years amid the COVID-19 pandemic, supply chain issues, tight inventory, credit constraints, and increasing demands from vendors for earlier payments, which have made it harder to keep shelves stocked.

Retailer Warns of Insufficient Funds

Meanwhile, an increasingly volatile economy and soaring inflation have prompted decreased consumer demand.

The situation was further worsened for Bed Bath & Beyond when GameStop Chairman Ryan Cohen, previously a major shareholder in the retailer, sold off his entire stake in the company in August last year.

A U.S. Securities and Exchange Commission (SEC) filing (pdf) shows that Cohen had owned stock and options representing over 9.4 million shares of the retailer before tapping out, sending shares of the company plummeting.

Last week, Bed Bath & Beyond warned that it has insufficient funds to pay off its debt and has defaulted on its credit line with lender JPMorgan, which could force it to consider restructuring its debt in bankruptcy court.

The company owes $550 million under its asset-backed loan with JP Morgan and $375 million to the investment firm and lender Sixth Street.

It also has $1.2 billion in high-risk unsecured notes with maturity dates spread across 2024, 2034, and 2044.

In a filing (pdf) with the SEC on Jan. 26, the retailer said that it had received a notice of acceleration and default interest from JPMorgan Chase under its credit agreement with the financial institution.

Defaulting on Loans

“The notice provides that as a result of the events of defaults that occurred on or around Jan. 13, 2023, and are continuing, which were among other things due to the company’s failure to prepay an over-advance and satisfy a financial covenant, the administrative agent has determined to exercise certain rights and remedies available pursuant to the Amended Credit Agreement,” Bed Bath & Beyond wrote.

According to the notice of acceleration and default interest, Bed Bath & Beyond must pay back the credit “immediately” or risk having to pay an additional interest rate of 2 percent per annum on the loan from JPMorgan Chase.

However, the struggling company warned 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.”

While it is forging ahead with a string of actions in the hope of avoiding bankruptcy, such as cutting costs, lowering capital expenditures, and reducing its store footprint, the company has stressed that such measures “may not be successful.”