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Well, it’s happened. After rounds of closures, mounting debt, and a failed attempt at securing funding, Bed Bath & Beyond filed for bankruptcy on April 24, 2023, and is preparing to close all their stores.
The bankruptcy filing is the latest and most serious milestone in the home goods store’s downward spiral. While the company’s official press release about the filing is a little confusing — it says stores will remain open while they “wind down” retail operations — the filing itself says BB&B expects to shut down all stores by June 30, 2023.
Hundreds of stores are already in the midst of Bed Bath & Beyond liquidation sales, but now all 700-ish stores (plus the more than 100 buybuy Baby stores the company owns) are going to join them. (You’ll want to use any BB&B coupons you have by Wednesday, April 26, and gift cards by May 8!)
While it’s not too late (yet) to save money at Bed Bath & Beyond, time seems to be running out.
Here’s how we got here:
1. Sales numbers have tanked for years and were getting worse.
Bed Bath & Beyond has been struggling for some time now. The company has faced intense competition from online retailers like Amazon as well as newer brick-and-mortar stores that offer similar products at lower prices.
The most recent quarterly sales report, shared Jan. 10, 2023, showed the biggest sales decline yet for Bed Bath & Beyond, with their net sales numbers at 33% under the previous year.
Company reports say that follows the last two quarters’ hefty declines of 26% and 23%. That makes the fiscal year decreases of about 7% in 2019, 2020, and 2021 look good by comparison.
And while holiday season numbers haven’t been released, Placer.ai reported that December 2022 foot traffic was down 26.5% compared to December 2021.
Those bad sales numbers mean big losses for the company — and snowballing debt. It’s a story we’ve read (and written) a bunch of times over the years for retailers like Pier 1, Kmart/Sears, and Olympia Sports.
Related: Here’s How to Get the Best Deals During Bed Bath & Beyond Liquidation Sales
2. Customers had a hard time finding products on the shelves.
The company’s financial problems have meant that Bed Bath & Beyond spent less on inventory — which meant that customers would often find empty shelves in some parts of the store and more popular items out of stock.
Bed Bath & Beyond says any money they made during the holiday season has been used to purchase more inventory in the new year. But analysts wondered if that was too little, too late.
3. Bed Bath & Beyond has been in a downward spiral of closing U.S. stores.
Bed Bath & Beyond had been closing stores at an increasing clip lately.
On Jan. 10, 2023, Bed Bath & Beyond announced that approximately 120 locations would be closing. Just three weeks later on Jan. 31, the company added 141 more stores to their list of closures, bringing the total number of stores closing to nearly 300 — much higher than the initial 56 stores that were announced for closure in September 2022. As of May 2020, there were almost 1,500 stores, but as of April 2023, that total number was closer to 700.
4. Bed Bath & Beyond just went through widespread layoffs, leaving fewer employees in the stores.
CNBC shared a recent company memo indicating that Bed Bath & Beyond has started a new round of layoffs that will reduce the number of employees “across our corporate, supply chain and store portfolio.”
The new layoffs aren’t entirely surprising; in August 2022 Bed Bath & Beyond said they would lay off about 20% of their workforce. It’s all in an effort to trim expenses by $80 million to $100 million.
But there’s concern that fewer employees make an already-maligned customer experience worse.
5. They shut down all operations in Canada first.
Bed Bath & Beyond’s operations in Canada — including both Bed Bath & Beyond and Buybuy Baby stores — went bankrupt first. The Canadian side of the business has lost a lot of money in the past, and this has affected the overall financial performance of the parent company.
As a result, the Canadian division has been granted protection by a court and is in the process of closing down all 54 Bed Bath & Beyond stores and 11 Buybuy Baby stores in that country.
6. Buybuy Baby and Harmon stores also started closing.
For the first time, Bed Bath & Beyond started closing some of their other stores — sister store chain buybuy Baby and Harmon health and beauty stores.
At one point, the company was planning to sell off or spin off buybuy Baby stores in order to raise money for the struggling Bed Bath & Beyond, but now the plan is to shut down all of the sister stores as well.
