Bed, Bath & Beyond to File Bankruptcy, Report Says
Retail giant Bed, Bath & Beyond is reportedly preparing to file bankruptcy, and it may come soon. Four sources familiar with the plans spoke to reporters from Reuters on Monday, noting that there are arrangements for liquidation sales and store closures already underway. They expect the bankruptcy filing to become official as soon as this week.
Bed, Bath & Beyond advisers and executives were reportedly locked in long meetings on Monday exploring every possible option to avoid bankruptcy, but their outlook was still grim. A source said that the company is seeking a loan to help buoy it through the bankruptcy proceedings, and is also in contact with liquidators to organize store-closing sales and the other mundane work required to shut down a retail giant. At this point, retail liquidation is probably a familiar sight to most shoppers in the U.S. who have seen once-ubiquitous chain stores fall from grace over the last decade or so.
So far, none of these plans have been announced or even discussed publicly, so these sources all spoke to Reuters on the condition of anonymity. They said that Bed, Bath & Beyond is in talks with the investment firm Sixth Street, which loaned the company $375 million last year. This may be the firm that lends it additional money for the bankruptcy process, which could speed things along. If the company files for bankruptcy this week, liquidators are reportedly prepared to start extreme sales as soon as this weekend.
The latest official announcements from the company were already pretty grim. The chain announced the closure of 150 stores last year, and recently said it would close another 87 Bed, Bath & Beyond locations soon. It will also be closing five of its Buybuy BABY stores and shuttering the last of its Harmon discount health and beauty stores. With these closures in mind, a bankruptcy filing wouldn't be the biggest surprise.
On the other hand, the insiders noted that there is still time for a last-minute buyer to step in and take over some or all of these chains. There is reportedly some hope that someone will buy out Buybuy BABY separately from the others. In deals like this, buyers often wait until after the bankruptcy filing has gone public in the hopes of negotiating the best terms possible.
Sixth Street declined to comment on Reuters' report while Bed, Bath & Beyond said that it is working with advisers to consider "multiple paths" forward. The company confirmed that it defaulted on a loan last week and may do the same in February. It declined to comment specifically on the question of bankruptcy.0comments