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Bed Bath & Beyond Files for Bankruptcy
After years of losses and failed turnaround plans, Bed Bath & Beyond Inc. has filed for bankruptcy protection and plans to wind down its business. The once-popular retailer's efforts to stay afloat, including securing a $375 million loan and a $1 billion financing deal with a hedge fund, were not enough to stem losses or prevent the closure of hundreds of stores.
The bankruptcy filing will eventually lead to the closure of all 360 Bed Bath & Beyond and 120 Buybuy Baby retail locations, though Sixth Street Partners has put up $240 million to keep the company operating through the liquidation process.
While Bed Bath & Beyond plans to conduct going-out-of-business sales and solicit interest from potential buyers for its remaining assets, individual investors who supported the company in its final months may be wiped out. If a bidder emerges, Bed Bath & Beyond will pivot away from liquidation plans to pursue a sale.
Like many other once-ubiquitous retail chains, such as J.C. Penney, Sears, and Toys ‘R’ Us, Bed Bath & Beyond's downfall was the result of losing shoppers to rivals and struggling to stock its stores.
The founders of Bed Bath & Beyond, Warren Eisenberg and Leonard Feinstein, prioritized buying merchandise over aesthetics with their limited funds when they opened their first two stores in New York City suburbs in 1971. They piled products to the ceiling to cover industrial fixtures, creating the cluttered look that became a hallmark of the chain.
This ensured that shoppers would always find something to buy, even if they came in for a specific item like a mattress pad. The company went public in 1992 and expanded to more than 1,550 stores, acquiring additional chains such as Buybuy Baby, Christmas Tree Shops, Harmon drugstore chain, and One Kings Lane.