Bed Bath & Beyond filed for Chapter 11 bankruptcy protection on Sunday, after failing to secure funds to stay afloat, and began a liquidation sale.
The home goods retailer, which shot to popularity in the 1990s as a go-to for couples making wedding registries and planning babies, has seen demand drop off as a strategy to sell more store-branded products flopped.
Last year’s moves to abandon that strategy, and to bring in more national brands, had not shown signs of working, with the company reporting a loss of about $393m after sales plunged 33% for the quarter ending 26 November.
Share prices surged as part of the “meme stocks” craze but nonetheless the Union, New Jersey-based retailer filed for bankruptcy in a New Jersey court, listing both its estimated assets and liabilities in the range of $1bn and $10bn, according to a court filing.
The company said it had received a commitment of approximately $240m in debtor-in-possession financing from Sixth Street Specialty Lending, according to a statement.
While the retailer has begun a liquidation sale, it intends to use the Chapter 11 proceedings to conduct a limited sale and marketing process for some or all of its assets.
The company added that its 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open as it starts efforts to effect the closure of its retail locations.
In January, the company raised doubts about its ability to continue – just months after it announced more than $500m in new financing, as well as job cuts and 150 store closures. In February, the retailer had planned to raise about $1bn through the offering of preferred stock and warrants to avoid bankruptcy.
The company was able to raise $360m from the complex deal helping it pay loan defaults and interest payments for senior notes.
But it terminated the deal in late March and announced plans to sell $300m worth of its shares, warning it might have to file for bankruptcy if it could not secure the funds.
In February, according to a court filing, Bed Bath & Beyond Canadian operations were going out of business. The Canadian division, which operates 54 Bed Bath & Beyond stores and 11 buybuy BABY stores, is insolvent, the filing posted on the website of consultancy Alvarez & Marsal showed.
