Large US Retailer Files for Chapter 11 Bankruptcy
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A former retail fixture for millions of Americans will soon fade away now that Bed Bath & Beyond has filed for reorganization under Chapter 11 of the federal bankruptcy laws.
In its bankruptcy filing, the company said it had $4.4 billion in assets and $5.2 billion in debt, according to CNN.
The company announced in a release that it was able to secure enough financing to close its stores and wrap up operations. No end date for store operations was announced.
The iconic 20-percent-off coupons are no longer being accepted, CNN reported. Instead, Bed Bath & Beyond is having a mammoth going-out-of-business sale and with major discounts.
The company’s release said that as it sells off its inventory, it will also try to sell any remaining assets anyone wants to buy.
The company said that for now, all 360 Bed Bath & Beyond and 120 Buybuy BABY stores and their company’s websites will be open for business.
Bed Bath & Beyond has been struggling since the pandemic, and had been flirting with bankruptcy throughout the year.
As noted by CNN, it had proposed massive store closings to focus on stores making money.
“We are going to see the Darwinism of retail,” Michael Lasser, a retail analyst at investment firm UBS, who has covered Bed Bath & Beyond for 16 years, said according to The New York Times.
He said the coming year “will be characterized, in part, by seeing that play out after this period of what would have been a pause in the Darwinism.”
Neil Saunders, managing director at data analysis company GlobalData’s retail division, said the filing illustrates the difficulty of rebounding once a cash shortage triggers a loss of inventory and sales.
“It’s a death spiral,” he said.
“If you can’t get the stock, you can’t make the sales. If you can’t make the sales, your credit deteriorates. If your credit deteriorates, people are less willing to supply you. That cycle seems impossible to break,” Saunders explained.
CNN noted that retail sector bankruptcies are rising.
The outlet cited relatively recent filings by Party City, Tuesday Morning, mattress manufacturer Serta Simmons and Independent Pet Partners, a pet store retailer.
One of the bigger names in that retail sector, David’s Bridal, a national wedding gown store, filed for Chapter 11 reorganization recently, as well.
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