Bed Bath & Beyond and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey to implement an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets.
To facilitate this process, the company has received a commitment of approximately $240 million in debtor-in-possession financing (DIP) from Sixth Street Specialty Lending. Following court approval, the company expects this financing to provide the necessary liquidity to support operations during the Chapter 11 process.
The company’s 360 Bed Bath & Beyond and 120 buybuy BABY stores and websites will remain open and continue serving customers as the company begins its efforts to effectuate the closure of its retail locations. Through the filing of customary motions with the court, the company intends to uphold its commitments to customers, employees and partners, including continued payment of employee wages and benefits, maintaining customer programs and honoring obligations to critical vendors.
“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,” Sue Gove, president and CEO of Bed Bath & Beyond, said. “Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and buybuy BABY. 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.”
For decades, Bed Bath & Beyond set the standard across the home goods sector and held its position through many different economic cycles and alongside a continuously evolving customer. In late 2022, the company initiated a significant turnaround plan to reset foundational elements of its operational and financial positioning to better serve customers, employees and supplier partners. Actions have been underway to improve merchandise assortment, streamline supply chain and optimize its store footprint.
While the company has commenced a liquidation sale, Bed Bath & Beyond intends to use the Chapter 11 proceedings to conduct a limited sale and marketing process for some or all of its assets. The company has filed motions with the court seeking authority to market Bed Bath & Beyond and buybuy BABY as part of an auction pursuant to section 363 of the Bankruptcy Code. Alongside these efforts, the company is also strategically managing inventory to preserve value. In the event of a successful sale, the company will pivot away from any store closings needed to implement a transaction. The company believes this dual-path process will best maximize value.
Kirkland & Ellis and Cole Schotz are serving as legal counsel, Lazard Frères is serving as investment banker and AlixPartners is serving as financial advisor. Bed Bath & Beyond has retained Hilco Merchant Resources to assist with inventory sales.