Bed Bath & Beyond, a troubled retail giant, has applied for Chapter 11 bankruptcy protection in the US. The company plans to conduct an organised closure of its business, including its Buy Buy Baby brand, and shut down all of its remaining 475 stores by the end of June.
It also stated that it is exploring potential buyers for its assets. The company has been grappling with financial difficulties for several years and had already announced plans to lay off workers and close 150 stores.
Last month, it revealed its intention to sell $300 million (£241.1 million) worth of shares and warned that bankruptcy might be necessary if the funding wasn’t secured. The once-popular destination for household goods has struggled to keep pace with the growth of e-commerce.
Chapter 11 protection delays a US company’s obligations to its creditors, giving it an opportunity to restructure its debts or dispose of some parts of the business.
In a filing to the United States Bankruptcy Court for the District of New Jersey on Sunday, the retailer said “the past twelve months have undoubtedly been the most difficult and turbulent in Bed Bath & Beyond’s storied history.”
It added that despite “painstaking, creative, and exhaustive efforts to right the ship along the way, Bed Bath & Beyond is simply unable to service its funded debt obligations while simultaneously supplying sufficient inventory to its store locations.”
Notices on the Bed Bath & Beyond and Buy Buy Baby websites said the stores “remain open to serve you”, without offering a timeline for when services will cease.
“Millions of customers have trusted us through the most important milestones in their lives – from going to college to getting married, settling into a new home to having a baby,” Bed Bath & Beyond president and chief executive Sue Gove said in a statement.
In addition, the company announced that it has received $240 million in financing from Sixth Street Specialty Lending, based in Texas, to support its winding down process.
Bed Bath & Beyond was established in 1971 under the name Bed ‘n Bath, referring to its original product line. However, over time, the company expanded its merchandise to include a wide range of items, from beddings to home appliances. During its peak in the 2010s, Bed Bath & Beyond was the largest home furnishing retailer in the US, operating over 970 stores in all 50 states.
Nonetheless, in recent years, it has struggled with diminishing profits as more consumers opted to purchase items online. Earlier this year, the company revealed that it had secured over $500 million in fresh funding but also announced plans to close 150 stores and cut jobs in a bid to turn the business around.