Bed Bath & Beyond bankruptcy reason: What went wrong with American home goods retailer?
Bed Bath & Beyond's bankruptcy came as a major shock as the company is among the largest retail player in the United States of America-
In what came as a major shock for the Americans, a 52-year-old major home goods retailer named Bed Bath & Beyond filed for bankruptcy in New Jersey saying that it will close down it businesses at all 360 stores starting from Wednesday. Bed Bath & Beyond's bankruptcy came as a major shock as the company is among the largest retail player in the United States of America. Not only this, Bed Bath & Beyond bankruptcy announcement also stated that it will close down 120 Buy Buy Baby stores it owns. As soon as Bed Bath & Beyond's bankruptcy was announced, tensions started to prevail among Americans specially among those who were loyal customers and possessed major gift cards. However, Bed Bath & Beyond clarified that although it will stop accepting coupons and discounts, Gift cards will be valid till May 8. Now, the question arises what is Bed Bath & Beyond bankruptcy reason? To know the answer continue reading-
What is Bed Bath & Beyond's bankruptcy reason?
Notably, Bed Bath & Beyond's bankruptcy announcement came as the last solution for the 52-year-old company. Notably, the sword of bankruptcy was dangling upon Bed Bath & Beyond since January this year. However, Bed Bath & Beyond had tried multiple last-ditch effort to bring the company out of bankruptcy. For the unversed, last summer, Bed Bath & Beyond announced a restricting model in order to get rid of the threat of bankruptcy. To get out of the bankruptcy threat, Bed Bath & Beyond had announced that mass layoff which included firing of 20 percent of the work force, and shutting down its 150 stores that were under 'low producing' category. However, with Bed Bath & Beyond filed for bankruptcy, it can be said that their master plan did not work and they are now forced to shut down all its operations with little online shopping and marketing still being operational. Now, the question arises despite of the cost-cutting and mass firing, why Bed Bath & Beyond still went bankrupt?
The answer is declining customer footfall and reduced levels of inventory availability. As per Bed Bath & Beyond, it had stated that the reason to file bankruptcy is "lower customer traffic and reduced levels of inventory availability" as it flagged "substantial doubt about the company's ability to continue as a going concern." Not only this, Bed Bath & Beyond had stated that its weekend sales plunged to 40 to 50 percent from more than a year. Before that the sales fell down to 32 percent. Due to this, Bed Bath & Beyond bankruptcy was inevitable.
Bed Bath & Beyond missed the 'COVID boon'
As per US media reports, Bed Bath & Beyond missed the COVID boon. Meaning, Bed Bath & Beyond missed the bus when home retailers witnessed a surge in sales. Reports suggest that Bed Bath & Beyond's attention was more towards replacing ig brands with more profitable private brands than focusing on to amp its sale during the COVID lockdown period. through its online website. This particular strategy of Bed Bath & Beyond worsened the industry-wide supply chain crisis, leaving top products like KitchenAid mixers missing from Bed Bath's shelves. It is pertinent to mention here that last year, Bed Bath & Beyond's shares amped up but soon nose dive when a report suggested that the activist investor Ryan Cohen invested in the company. Ryan shook up corporate leadership and then cashed out of his bet with a normal profit, hence the stock price raised and then nosedived.
As per reports, Bed Bath & Beyond suffered a loss of approximately $393 million in 2022 as of November. With the company suffering a heavy loss, giants like Amazon which had deep pocked survived, which Bed Bath & Beyond could not. It is pertinent to mention here that COVID pandemic has pushed multiple giants into bankruptcy apart from Bed Beyond & Bath namely- J.C. Penney, Neiman Marcus, and J. Crew.
Americans react to Bed Bath & Beyond's bankruptcy
A user wrote, "Two Years After Canceling Mike Lindell Bed Bath & Beyond Files For Bankruptcy"
GO WOKE GO BROKE— TheyCallMeDoc (@TheyCallMeDoc1) April 24, 2023
Two Years After Canceling Mike Lindell Bed Bath & Beyond Files For Bankruptcy pic.twitter.com/q2uN6hWOo8
Another user wrote, "Bed Bath & Beyond blew one billion dollars on stock buybacks, a direct cash transfer to shareholders, in 2021. Now it's bankrupt, in no small part because of that $1B hole, and....no severance for workers who've been there for 20 years."
"Liza Minnelli has outlived Bed Bath & Beyond. The company has filed for bankruptcy and will go out of business." wrote another user.