Bed Bath & Beyond files for Chapter 11 bankruptcy protection, customers rush to use coupons

Bed Bath & Beyond Inc. has been struggling to keep its business afloat for quite some time now, and on Sunday, April 23, it finally filed for Chapter 11 bankruptcy protection. The big box retail store chain company made this decision after failing to secure enough funds to continue with its operations.

Bed Bath & Beyond made the bankruptcy filing at a District of New Jersey court. In the court filing, the company listed its estimated assets and liabilities are about $1 billion and $10 billion. Reuters reported that the retailer also received a commitment of around $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc.

Filing for Chapter 11 bankruptcy does not mean that Bed Bath & Beyond is immediately going out of business. In fact, many companies do this to eliminate debts and costs that they can no longer pay, as this gives them a chance to restructure and get the business back on track.

But while companies can emerge from bankruptcy through Chapter 11 protection, the future is their business is not yet guaranteed, so careful decisions and serious work to get the company together are crucial, and this applies to Bed Bath & Beyond as well.

Moreover, even with the declaration of bankruptcy, the retailer will continue to operate its 360 stores along with its 120 buybuy BABY stores. These stores and their websites will remain open and Bed Bath & Beyond will use the $240 million loan it secured to fund the operations during bankruptcy. The company will still close some stores, and closing-out sales are set to start on Wednesday, April 26.

"Millions of customers have trusted us through the most important milestones in their lives – from going to college to getting married, settling into a new home to having a baby," Bed Bath & Beyond Inc. president and chief executive officer, Sue Gove, said in a press release for their voluntary bankruptcy filing. "Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and buybuy BABY."

She added, "We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process. We will continue working diligently to maximize value for the benefit of all stakeholders."

Meanwhile, The New York Times reported that customers are rushing to Bed Bath & Beyond stores after the announcement of the bankruptcy filing. They only have a few days left to use them all up. Some shoppers even hand out unused coupons to other customers, friends, or family, or these will only go to waste.

Photo by: Mike Kalasnik/Flickr (CC BY-SA 2.0)