Bed Bath & Beyond declares that it can no longer pay its debts
The end could be near for struggling retailer Bed Bath & Beyond, as it warned in a regulatory filing on Thursday that it had received a notice of default from its lender, JPMorgan Chase. Shares of Bed Bath & Beyond (BBBY) plunged more than 20% on the news, to around $2.56 per share.
The company said in its SEC filing on Thursday that “at this time, the company does not have sufficient resources to repay amounts under the credit facilities, which will lead the company to consider all alternatives. strategic, including the restructuring of its debt under the US bankruptcy code.
Bed Bath & Beyond defaulted “on or about” Jan. 13, according to the Securities & Exchange Commission filing. As a result, creditors demand immediate payment.
Bed Bath & Beyond may be forced to file for Chapter 11 relief due to its financial difficulties.
The company added that it was also cutting costs, cutting capital expenditures and closing stores and distribution centers.
Founded in 1971, Bed Bath & Beyond has become a go-to for affordable home decor, kitchenware and college dorm furniture. The retailer has become known for its ubiquitous blue 20% off coupons and cavernous stores with merchandise stacked to the ceilings.
But the company has struggled to make the transition to online shopping and fend off big chains such as Walmart (WMT) and Target (TGT) (TGT). Many shoppers have turned to these competitors as the novelty of Bed Bath & Beyond’s coupons has faded – consumers can find many cheaper alternatives on Amazon (AMZN) (AMZN) and other online sites.
The company has also been hit hard during the pandemic, temporarily closing stores in 2020 while rivals remained open. The company lost 17% of its sales in 2020 and 14% in 2021.
Bed Bath & Beyond has tapped into several executives and turnaround strategies in recent years, including former Target executive Mark Tritton, who left the company last year after less than three years as CEO.
As of February 2022, Bed Bath & Beyond had 950 stores and 32,000 workers. The company also owns children’s retailer buybuy Baby.