Bed Bath & Beyond, with 13 stores in Michigan, files for bankruptcy protection

Bed Bath & Beyond — the chain retailer that offered, as its name suggested, linens, towels, and other household wares — filed Sunday for bankruptcy protection.

The Union, New Jersey-based company said in court documents it is seeking a buyer for its remaining 360 Bed Bath & Beyond stores and 120 Buy Buy Baby sites, as well as its websites. It will remain open for a while longer. However, Tuesday is the last day to use coupons.

More than the collapse of an iconic big box retailer, the filing offers a window of what’s to come in the retail industry, given the changing landscape with online sales, the struggles other chains are having and challenges in the U.S. economy.

The company anticipates accepting gift cards, gift certificates and loyalty certificates only through May 8. It expects to accept usual returns and exchanges until May 24, but it plans to close all its stores nationwide — including 13 stores in Michigan, more than half of which are in metro Detroit — by June 30.

What will happen to the workers?

Bed Bath & Beyond employs 14,000 workers, down from 32,000 a little more than a year ago, according to the court filing. Now, with a potential closure of the stores, those remaining jobs are at risk, unless a buyer is found that decides to keep the stores open.

Years of dismal sales and losses

The latest news was no surprise, with the company saying in January that it may need to file for bankruptcy as sales continued to drop and it struggled to attract shoppers. A month later, it announced plans to close 150 stores and  and raise $1 billion in funding through a public stock offering.

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The retailer, which listed its assets and liabilities in the range of $1 billion to $10 billion, said it voluntarily made the filing "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."

The end of a retailing institution

Bed Bath & Beyond said it secured a commitment of about $240 million in financing from Sixth Street Specialty Lending, which is just enough to allow it to keep operating throughout the bankruptcy process, but that amount was insufficient for a turnaround.

"It’s the death of an icon. A lot of people have grown up with it," said Neil Saunders, managing director of GlobalData Retail. "It’s an institution in retailing, but unfortunately being an institution doesn’t protect you from financial woes."

How the iconic company started

Bed Bath & Beyond was founded in 1971, and, for years, enjoyed its status as a big box retailer that offered a vast selection of sheets, towels and gadgets that department store rivals didn't.

It was the place to go to for the latest household items and before sending kids off to college. It was among the first to introduce shoppers to many of today’s household items like the air fryer or single-serve coffee maker, and its 15% to 20% coupons were ubiquitous.

Beat by online competition

For the last decade or so, Bed Bath & Beyond struggled with weak sales, largely because of its messy assortments and lagging online strategy that made it hard to compete with the likes of Target and Walmart, both of which have spruced up their home departments with higher quality sheets and beddings.

Online players like Wayfair lured customers away with affordable and trendy furniture and home décor.

Failed turnaround efforts

In late 2019, Bed Bath & Beyond tapped Target executive Mark Tritton to take the helm and turn around sales. He reduced coupons and started to introduce store label brands at the expense of national labels, a strategy that proved disastrous.

Moreover, the pandemic forced the retailer to temporarily close its stores.

Analysts said the company was never able to use the health crisis to pivot to a successful online strategy.

Supply chain fails, sales fall

While many retailers were grappling with supply chain issues a year ago, Bed Bath was among the most vulnerable, missing many of its 200 best-selling items including kitchen appliances and personal electronics, during the holiday 2021 season.

By June 2022, the retailer ousted Tritton after two back-to-back quarters of dismal sales.

New plan, new CEO also fail

In recent months, the company, under the stewardship of recently appointed president and CEO Sue Grove, went back to its original strategy of focusing on national brands, instead of pushing its own store labels. But it was too late and the company had a hard time getting suppliers commit to delivering merchandise.

The bankruptcy filing comes as the company’s shares tumbled with speculation of the impending bankruptcy filing and deteriorating financial performance. In late March, the company noted that preliminary results showed anywhere from a 40% to 50% decline in sales at stores opened at least a year.

Retail, economic challenges

Bed Bath & Beyond joins a growing list of retailers that have filed for bankruptcy so far this year including party supplies chain Party City and David’s Bridal.

During the depths of the pandemic, a number of retailers filed for Chapter 11 bankruptcy including Neiman Marcus and J.C. Penney.

In 2022, there was a respite in retail bankruptcy filings as shoppers, flush with government stimulus money and a pile of savings, spent with abandon, helping to lift all types of retailers. But as credit tightens and inflation remains stubborn, shoppers have been tightening their purse strings.

More: Bed Bath & Beyond to close 7 more stores in Michigan

Metro Detroit Bed, Bath & Beyond locations

• 31535 Southfield Road, Beverly Hills

• 43610 W. Oaks Drive, Novi

• 1242 S. Rochester Road, Rochester Hills

• 650 John R Road, Troy

• 12020 Hall Road, Sterling Heights

• 30801 Gratiot Ave., Roseville

• 23871 Eureka Road, Taylor

The other Michigan locations are in Flint, Grand Rapids, Holland, Petoskey, Saginaw and Traverse City.

Metro Detroit Buy Buy Baby locations

• 13361 Hall Road, Utica

• 28512 Telegraph Road, Southfield

• 42595 Ford Road, Canton

The only other Michigan location is in Grand Rapids.

Associated Press writers Anne D'Innocenzio and Bruce Shipkowski contributed to this report.

This article originally appeared on Detroit Free Press: Bed Bath & Beyond seeks bankruptcy protection, plans to close stores