Bed Bath and Beyond Inc filed for Chapter 11 bankruptcy protection on Sunday after the home goods retailer failed to secure funds to stay afloat. The Union, New Jersey-based home goods retailer filed for bankruptcy in a District of New Jersey court, listing both its estimated assets and liabilities in the range of $1 billion and $10 billion, according to a court filing.
Bed Bath & Beyond said that it has received a commitment of approximately $240 million in debtor-in-possession financing from Sixth Street Specialty Lending Inc, according to a separate statement.
The company added that its 360 Bed Bath & Beyond and 120 Buybuy Baby stores and websites will remain open and continue serving customers as it begins efforts to effect the closure of its retail locations.
In February, the embattled retailer had planned to raise around $1 billion through the offering of preferred stock and warrants to avoid bankruptcy.
The company was able to raise $360 million from the complex deal helping it pay loan defaults and interest payments for senior notes.
But Bed Bath terminated the deal in late March and announced plans to sell $300 million worth of its shares while also once again warning it might have to file for bankruptcy if it could not secure the funds.
The Union, New Jersey-based home goods retailer, which shot to popularity in the 1990s as a go-to shopping destination for couples making wedding registries and planning for new babies, has seen demand drop off in recent years as its merchandising strategy to sell more store-branded products flopped.
Last year’s moves to abandon that strategy, and to bring in more national brands that shoppers recognize, had not shown signs of working, with the company reporting a loss of about $393 million after sales plunged 33 per cent for the quarter ending November 26.
In January, the company raised doubts about its ability to continue as a going concern just months after it announced more than $500 million in new financing, as well as job cuts and 150 store closures.
Retailers in distress often look to bankruptcy protection after the holiday season to take advantage of the cash cushion provided by recent sales.
In February, according to a court filing, Bed Bath & Beyond’s Canadian operations were going out of business. The Canadian division, which operates 54 Bed Bath & Beyond stores and 11 Buybuy Baby stores, is insolvent, the filing posted on the website of consultancy Alvarez and Marsal showed.
Bed Bath said in March it was seeking shareholder approval for a reverse stock split in the range of 1-for-5 to 1-for-10 and its board earlier in April urged shareholders to approve the split saying that if the plan fails, bankruptcy would be imminent.