Bed Bath & Beyond could go bankrupt as the coupon king loses its category-killer crown
Throwing in the (bath) towel… Shares of Bed Bath & Beyond lost over a quarter of their value yesterday after the embattled retailer said it might file for bankruptcy. Refresher: BB&B has racked up big debts over the years and has struggled to attract new shoppers online and in stores. Now the home-goods legend says it may not have enough $$ to cover key expenses.
- Looking back: In September, BB&B announced lifeline plans to close 150 stores, slash 20% of its workforce, and raise $500M in financing. Update: it still needs help.
- Moving forward: BB&B expects its net loss will soar 40% to $386M for the third quarter (which includes Black Friday). Q3 sales are forecast to sink 33% from last year.
Private label, public problems… During the pandemic shopping boom, BB&B focused on creating private-label brands to compete with cheaper offerings from Amazon and Walmart. Yet the pivot resulted in shoppers struggling to find recognizable brands they actually wanted (think: Keurigs and KitchenAid mixers). Last year, BB&B said it had lost $175M in sales because of out-of-stock items. Now it’s still exploring non-bankruptcy options like restructuring and raising cash, but it could be too little too late.
Category-killers are getting killed… Old-school category-killers like Barnes & Noble, Blockbuster, and BB&B snatched sales from small businesses as they spread across America. BB&B used to be the go-to for dorm hauls and bathroom makeovers. Now shoppers have a wide variety of online retailers (cough, Amazon) to choose from, and OG category-killers are dying. Case in point: Toys R Us filed for bankruptcy in 2017 and JCPenney followed suit in 2020.