NEW YORK, Jan 30 (Reuters) – Bed Bath & Beyond Inc (BBBY.O) is preparing to seek bankruptcy protection as early as this week and has lined up liquidators to close additional stores unless a last-minute buyer emerges, four people familiar with the issue said Monday.
The timing of any bankruptcy filing was in flux Monday night, with advisers at the US homewares retailer locked in meetings exploring all remaining options to avoid it, another person familiar with the matter said.
Bed Bath & Beyond is negotiating a loan to help it navigate bankruptcy proceedings, with investment firm Sixth Street in talks to provide funding, two of the people said. Last year, the company loaned $375 million to Bed Bath & Beyond.
The chain, once considered a category killer in homewares like tableware and small appliances, has lined up liquidators who are preparing store closing sales that could kick off as soon as this weekend, two of the people said. .
The people spoke on condition of anonymity because the talks are not public.
The chain said it was closing 87 Bed Bath & Beyond stores and five buybuy BABY stores, in addition to the 150 closures announced last year. It is also closing its health and beauty discount chain Harmon.
People have warned that a last-minute buyer for the chain could emerge, or it could still sign a deal for its brands such as buybuy BABY. Prospective buyers sometimes wait for a company to file for bankruptcy before agreeing to buy assets, hoping to negotiate more favorable terms.
Bed Bath & Beyond said in a statement to Reuters it was continuing to work with its advisers to consider “multiple avenues”, but declined to comment on any bankruptcy planning.
The company has previously said it was exploring a range of options to deal with the sales slump, including selling assets, raising funds and declaring bankruptcy.
Sixth Street declined to comment.
Bed Bath & Beyond said last week that it defaulted on a loan, bringing it closer to bankruptcy. Sources also told Reuters that Bed Bath & Beyond was considering skipping debt payments due on Feb. 1, a typical move struggling businesses make to conserve cash.
Struggling retailers often decide to file for bankruptcy after the holiday season to take advantage of the cash cushion provided by recent sales.
Toys R Us was liquidated in March 2018 in one of the biggest failures yet by a specialty retailer.
As of February 2022, Bed Bath & Beyond had 953 locations, including buybuy BABY.
Bed Bath & Beyond had for years been considered a go-to shopping destination for couples setting up wedding registries and planning new babies, but it lost its footing when it tried to expand into store brands.
The retailer’s management has since backtracked and aimed to bring in national brands that shoppers were familiar with the chain for. But the strategy did not gain traction with buyers.
Earlier this month the company raised doubts about its ability to continue in business and said it would cut jobs.
Bed Bath & Beyond reported a loss of about $393 million after sales fell 33% for the quarter ending November 26.
Reporting by Jessica DiNapoli and Mike Spector; Editing by Cynthia Osterman and Jamie Freed
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