Bed Bath and Beyond (BBBY) is officially bankrupt.
That's according to a Sunday statement, when the beleaguered retailer officially announced it had filed for Chapter 11 bankruptcy protection with the District of New Jersey bankruptcy court.
DON'T MISS: Bed Bath & Beyond Closes an Entire Chain as Bankruptcy Looms
"Bed Bath & Beyond Inc. today announced that it and certain of its subsidiaries (collectively, "the Company") filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court for the District of New Jersey (the "Court") to implement an orderly wind down of its businesses," the company said in a statement on April 23.
The move comes following an effort to potentially restructure its debt and reorient the direction of the company in early 2023. Last winter, Bed Bath & Beyond began closing Harmon, its discount beauty supply chain, across the U.S. It also closed 87 of its namesake stores, edging toward its goal of 150 shuttered stores by the end of 2022.
Bed Bath and Beyond Stores Are Closing
Bed Bath and Beyond operates roughly 360 Bed Bath & Beyond stores and 120 BuyBuy Baby stores across the U.S. and Puerto Rico. It is currently searching for a buyer for its remaining assets but all of its stores are expected to shutter imminently. According to a Monday report, the company expects all its stores and lots to be sold and empty by June 30, 2023.
It will stop accepting coupons and honoring membership discounts on Wednesday, April 26.
Bed Bath and Beyond also employs around 14,000 people. And while cutting them loose amidst a bankruptcy seems like the cheaper thing to do, it's still going to cost the company. It reportedly has $76 million of employee wages and benefits to pay out.
Bed Bath and Beyond Falls From Lockdown-Era Highs
While Bed Bath had been hinting a bankruptcy could be looming since January, the company was once a darling of the meme-stock era. In 2021, Bed Bath and Beyond led the charge as Gamestop, AMC and other beleaguered retail stocks were flying. It reached a 5-year high of just over $35 per share in late January 2021. Today, the stock sits at less than $0.30 per share.
The last major cash injection it got was in early February from Hudson Bay Capital - a shock to many onlookers who'd already written off the retailer. It received $1 billion for convertible preferred stock and warrants. This broke out into $225 million up front, with a max total of $800 million over the next seven years.
Of course, no money is free money, and Hudson Bay wrote in a few key conditions that the retailer would have to meet in order to keep the deal afloat. This included a stock-price minimum -- a death knell that ultimately doomed the agreement. It has since been terminated.
Some analysts look to Bed Bath and Beyond's bankruptcy as a bellwether for other poorly performing retailers in similar spaces. To others, the discount retailer shuttering is simply a blip on an otherwise relatively strong retail sector despite economic uncertainty. Target, Walmart and Amazon have all reported degrees of revenue growth over the past several cycles (though, admittedly, all three have cracked the online and last-mile fulfillment part of the equation, too).
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