Bed Bath & Beyond seeks capital infusion, buyer ahead of likely bankruptcy

Bed Bath & Beyond seeks capital infusion, buyer ahead of likely bankruptcy

Bed Bath & Beyond has been in discussions with potential patrons and lenders as it really works to maintain its enterprise afloat throughout a likely bankruptcy submitting, in keeping with individuals conversant in the matter.

The retailer is within the midst a sale course of in hopes of discovering a buyer that will hold the doorways open for each of its main chains, its namesake banner and Buybuy Baby, mentioned the individuals, who weren’t approved to debate the matter publicly.

At the identical time, Bed Bath has additionally been searching for a lender to offer financing that will hold the corporate going if it had been to file for bankruptcy safety within the coming weeks, the individuals mentioned.

A Bed Bath spokeswoman mentioned Wednesday the corporate does not touch upon particular relationships however has been working with strategic advisers to judge all paths to regain market share and improve liquidity.

“Multiple paths are being explored and we’re figuring out our subsequent steps totally, and in a well timed method,” the spokeswoman mentioned, declining to remark additional.

A consultant for AlixPartners, which CNBC lately reported was hired as the company’s advisor, declined to remark.

Earlier this month Bed Bath warned it may need to file for bankruptcy after its turnaround plans didn’t considerably enhance gross sales and restore its steadiness sheet. The firm reported net losses that exceed $1.12 billion for the primary 9 months of the fiscal yr. It’s blown via its liquidity in current months, shouldered a heavy debt load, and confronted strained relationships with its suppliers.

Comparable gross sales declined 32% year over year in the most recent fiscal quarter, ended Nov. 26. Company leaders mentioned the corporate has had a more durable time protecting cabinets stocked, as distributors change fee phrases or resolve to not ship merchandise as a result of of the retailer’s monetary challenges.

Last week, CNBC reported Bed Bath had begun another round of layoffs in an try to additional lower prices. The firm had about 32,000 workers as of Feb. 26, 2022, in keeping with public filings.

The firm has been working to discover a route that sees its chains survive, the individuals added. A day earlier than Bed Bath issued a “going concern” warning, it introduced in an worker memo that it had employed Shawn Hummell, a former Macy’s government, to steer its namesake model’s retail, retailer operations and merchandising operations as senior vp of shops. Prior to his time at Macy’s, Hummell labored for Abercrombie & Fitch, one other retailer that underwent a turnaround.

One doable buyer circling Bed Bath is personal fairness agency Sycamore Partners, in keeping with the individuals conversant in the discussions. Sycamore is especially occupied with Buybuy Baby, Bed Bath’s banner for infants and toddlers, which has outperformed the broader firm. Buybuy Baby has been deemed most likely to outlive going ahead, the individuals mentioned.

Still, a sale of Bed Bath as a complete stays on the desk — albeit with a a lot smaller footprint of shops than it at present has, the individuals mentioned.

Sycamore is understood for buying retailers, like girls’s attire chain Talbots, together with distressed corporations which have sought bankruptcy consideration like Ascena’s Ann Taylor. A Sycamore Partners spokesperson declined to remark. Dealbook previously reported Sycamore’s curiosity in Buybuy Baby.

Bed Bath has additionally drawn curiosity from corporations that purchase the mental property, or manufacturers, of corporations, significantly these beneath misery, the individuals mentioned. Authentic Brands, which has frequented many bankruptcy-run gross sales for retailers like Forever 21, has additionally been taking a look at Bed Bath, the individuals mentioned. A consultant for Authentic Brands did not instantly reply to remark.

Short of a sale, the corporate and its advisors have been trying to nail down further financing for a bankruptcy submitting, which might happen within the coming weeks, the individuals mentioned. The firm’s advisors are searching for a mortgage of at the very least $100 million, one of the individuals mentioned.

Last yr, Bed Bath obtained $375 million in new funding from lender Sixth Street Partners, which has offered financing to different retailers like J.C. Penney and Designer Brands.

Sixth Street’s facility could possibly be transformed into bankruptcy financing, the individuals mentioned, or the lender or others might convert their debt to fairness and turn into Bed Bath’s proprietor. A consultant for Sixth Street did not instantly reply to remark.

Bed Bath’s financing technique comes as fellow retailer Party City sought Chapter 11 protection this week. Also with a hefty debt load, Party City is trying to restructure its steadiness sheet and transfer ahead with a smaller footprint.

Bankruptcy legal professional Eric Snyder from regulation agency Wilk Auslander mentioned a sale was unrealistic for Bed Bath on account of its declining gross sales and stock, in addition to its expanded losses.

“They do not have the supply to proper the ship, and so they do not have the money to proceed to function,” Snyder mentioned. “I simply do not see some other choice apart from a bankruptcy and a liquidation.”

—CNBC’s Melissa Repko contributed to this report.