“Shop Closing” banner on the Bed Bath & Beyond store in Farmingdale, Recent York, Friday, January 6, 2023.
Johnny Milan | Bloomberg | Getty’s paintings
A shower in bed and more filed for Chapter 11 bankruptcy protection on Sunday after a series of ultimate attempts to boost enough capital to maintain the corporate alive failed at eleven o’clock.
The struggling homeware retailer has been warning of potential bankruptcy since early January, when it issued a press release going concern notice. that he may not have the money to cover expenses after the grim holiday season.
Bed Bath & Beyond Inc. announced today that it and certain subsidiaries have filed voluntary Chapter 11 exemptions with the U.S. Bankruptcy Court for the District of Recent Jersey for the orderly liquidation of its business while conducting a limited marketing process to solicit interest in a number of sales some or all of its assets” statement read on Sunday.
“The corporate’s 360 Bed Bath & Beyond and 120 buybuy BABY stores and web sites will remain open and proceed to serve customers as the corporate launches efforts to shut its stores.”
Since then, Bed Bath has been hanging by a thread, but it surely refuses to go down with no fight. It secured what was then believed to be a Hail Mary share offering in early February that was expected to bring greater than $1 billion in equity to Bed Bath, however the plan fell through and only raised $360 million, the corporate said.
In late March, Bed Bath announced one other stock offering that was expected to boost $300 million, however the news sent the stock price down and it was difficult to boost the funds the offering was alleged to provide. By April 10, the corporate had sold roughly 100.1 million shares and raised only $48.5 million.
Within the documents, the corporate warned that if it didn’t get the expected proceeds from the offering, it could likely need to file for bankruptcy protection.
A couple of days after the announcement of the second share offering, Bed Bath said it had partnered with liquidator Hilco Global to extend stock levels. Under the agreement, Hilco’s subsidiary ReStore Capital agreed to purchase as much as $120 million value of products from the corporate’s key suppliers after relations with Bed Bath’s suppliers deteriorated resulting from liquidity issues.
Nevertheless, the plans ultimately proved futile and weren’t enough to maintain the lights on.
The retailer was struggling to take care of relationships with its suppliers and was combating low inventory levels, delayed sales and rapidly shrinking piles of money.
Going into the vacation season, Bed Bath was struggling to maintain stock on shelves and resulting from liquidity issues some retailers began asking for prepayments, the corporate said in securities filings.
CEO Sue Grove led the corporate through a change attempt that she hoped would save the corporate, but these efforts coincided with high inflation affecting consumer spending while rising rates of interest slowed the housing market.
Furthermore, consumers who spent 2020 and 2021 at home and upgraded their living spaces throughout the pandemic are actually spending on travel, eating out and other outdoor activities.
In mid-January, the corporate was looking for a buyer willing to maintain it afloat with a money injection. Nevertheless, Bed Bath soon revealed in a securities filing that it didn’t have enough money to repay its debts and had defaulted on a line of credit with JPMorgan.
The corporate was in a position to repay the interest with funds raised from its initial stock offering, but then warned it could “probably” need to file for bankruptcy and liquidate its assets if the deal didn’t go as planned.
The corporate had loans from JPMorgan and lender Sixth Street, which were downgraded in late March after a second stock offering was announced. During that point, the overall revolving liability fell from $565 million to $300 million, and the revolving credit facility was reduced from $225 million to $175 million. Under the limited credit arrangements, Bed Bath was charged with monthly interest payments.
The corporate said it was attempting to cut costs by reducing capital expenditures, closing stores and negotiating leases, but warned in documents that the efforts “may fail”.
At the favored Bed Bath outlet in Recent York City, a fired worker recently told CNBC that employees stood around unsure of what to do after the corporate abruptly cut off pick-up and deliveries at the shop at the situation. The worker was told that liquidators would come the subsequent day, and he soon learned that employees wouldn’t receive severance payments after greater than twenty years with the corporate.
“It was just so quick,” said the worker.