Bed Bath & Beyond (NASDAQ:BBBY) filed for Chapter 11 bankruptcy protection on Sunday, after the home goods retailer failed to turn around its business and secure funds to stay afloat. The company stated that it would continue to operate its 360 Bed Bath & Beyond branded stores and 120 Buybuy Baby stores and websites as it begins to wind down its business.
Meanwhile, BBBY intends to conduct a “limited marketing process” to seek buyers for some or all of its assets. The company has filed motions with the New Jersey bankruptcy court seeking permission to auction its Bed Bath & Beyond and Buybuy Baby brands. Sixth Street Specialty Lending, Inc. has committed $240 million in debtor-in-possession financing for the bankruptcy proceedings.
As per a Financial Times report, court filings revealed that the company expects to eventually shut down all its stores by June 30 and generate net sales of $718 million. BBBY’s Chapter 11 filings mentioned that the retailer had $4.4 billion of assets and $5.2 billion in debts.
In early January, BBBY raised doubts about its ability to continue as a going concern. The company slashed its workforce and reduced its footprint to cut down costs. The rise in online retailers hit BBBY significantly. Moreover, the company’s strategy to shift to private brands from national brands backfired.
Weak sales, mounting losses, and a lack of finances ultimately led to BBBY’s fall. The company had earlier stated that it would try to raise $300 million by April 26 through the sale of new shares to avoid bankruptcy. However, BBBY’s declining share price made it difficult to raise the required amount. As of April 10, BBBY was able to raise about $48.5 million by selling 100.1 million shares under the offering. Shares have plunged over 87% since the start of this year.