Bed Bath & Beyond, a Category Killer during the Pandemic, Shuts Down Retail Stores and Delays Refinance
The company’s stores were temporarily shut down during the Pandemic as rivals remained open. In the year 2020, the company lost more than 15% of its sales.
The era of category killers included Bed Bath & Beyond, which dominated a category of retail called Sports Authority. Those companies, too, ultimately filed for bankruptcy.
Bed Bath said it expects to report sales declining by 33% compared to last year for the quarter that ended right after Black Friday, a reflection of “lower customer traffic and reduced levels of inventory availability.” The forecast suggested losses would increase by almost 40% to $385.8 million.
Bed Bath and Beyond has been part of the meme stock phenomenon, with shares skyrocketing as much as 400% last year when activist investor and GameStop chairman Ryan Cohen took a stake and sought changes.
Late summer, the company had secured financing that propelled it through the holiday shopping season. The retailer faces waning enthusiasm from its creditors as it attempts to refinance its debts.
Last week it announced that it was closing the remaining 49 stores, which were all selling cosmetics. A list of the new store closures wasn’t immediately available.
The home goods chain expects first quarter sales to be down by 30% to 40% with sequential quarterly sales improvement thereafter, according to the filing.
The company has avoided going bankrupt by completing a stock offering that will give it an injection of funds and a pledge to repay its debt in the future.
The Bed Bath & Beyond Company: The Rise of the 21st Century Bed Bath and Beyond (Cedar Shoppe) in the United States
Bed Bath & Beyond used to be called Bed Bath and Beyond, but it was changed to Bed Bath & Beyond in 1987. In 1992 the company went public and made over $200 million in sales.
Bed Bath & Beyond was hurt by the fact that home decor is a popular category online, as it was slow to make the transition to e-Commerce.
Daniel Gielchinsky is an attorney who is specializing in bankruptcy. Slow the cash burn is the name of the game for the next 6 to 12 months and allow the company to pivot into a profitable position.
Bed Bath & Beyond had a strong business during the back-to-school and college season as well as around the winter holidays.
The Bed ‘n Bath chain started in 1971, selling designer bedding for the first time, and has since expanded to include stores in Massachusetts, Pennsylvania and California. It did not rely on sales events to draw customers.
According to a report, Leonard Feinstein said that specialty stores were going to be the next wave of retailing after the department store shakeout. “It was the beginning of the designer approach to linens and housewares and we saw a real window of opportunity.”
The company was something of an iconoclast. It spent little on advertising, relying instead on print coupons distributed in weekly newspapers to attract customers.
The chain gave store managers more freedom to decide which products to stock, as well as allowing them to send products directly to stores rather than storing them in a central warehouse.
The change was hard on customers who were loyal to big brands. The company also fell behind on payments to vendors and stores did not have enough merchandise to stock shelves. Tritton left as CEO in 2022.