American retail giant Bed Bath & Beyond is likely to file for bankruptcy in a few weeks. The big box retailer has never been able to cope with the rise of e-commerce competitors.
Once a true category killer for bedding and small home furnishings, Bed Bath & Beyond is today a mere shadow of its former self. Back in August, the chain announced it would lay off a fifth of its staff, close some 150 shops and cut back on its private label range.
That intervention came too late, however: sales plummeted by as much as 33 % in the quarter ending in November. The company expects losses to grow 40 % to 385.5 million dollars (some 360 million euros). To make matters worse, Bed Bath & Beyond has to pay out another 1.5 billion dollars in bond interest on 1 February. Those funds are not there, so the retailer is considering applying for bankruptcy protection.
There is “substantial doubt about the company’s ability to continue“, the chain admitted to CNN. The home improvement chain is officially weighing its options – from a debt restructuring to selling parts – but behind the scenes the company is said to be preparing to file for bankruptcy within weeks.
If that bankruptcy comes, it will probably be used for a judicial restructuring: the current management says it does have a clear vision for the future and that transforming an organisation of that size takes time. Bed Bath & Beyond has nearly a thousand shops and 32,000 employees, and also owns the children’s retail chain buybuy Baby.
Bed Bath & Beyond’s problems date back to the first wave of digitisation. As a true big box retailer, known for its large shops and paper coupons, the chain was unable to cope with the arrival of strong online players like Amazon and the changing retail landscape. CEOs and big plans followed each other in rapid succession in recent years. During the pandemic, the non-essential retailer lost another 17 % (in 2020) and 14 % (in 2021) sales.