On April 23, 2023, Bed Bath & Beyond (BBBY) filed for Chapter 11 bankruptcy relief. The company, founded in 1971, intends to use the bankruptcy court to liquidate rather than reorganize. While not suggesting that BBBY's demise could have been avoided, Forbes' contributing writer, Peter Cohan, in his article, After 52 Years, Why Bed Bath & Beyond Went Bankrupt, discusses similarities between the company's downward spiral and that of electronics retailer Circuit City prior to its 2008 bankruptcy. (“Circuit City's bankruptcy was due to its inability to pay back the money it had borrowed to stock its shelves with inventory that customers were not buying.”) Cohan places considerable blame on BBBY's decision to substitute private label products for the branded products BBBY's customers expected and wanted. That decision impacted revenues negatively and dramatically, exacerbating the problems caused by the company's cash shortage. Ultimately, the failure to listen to its customers set the company on a path that will end in a New Jersey bankruptcy court.
As BBBY bankruptcy proceedings continue, the Taylor English Creditors’ Rights and Bankruptcy team will be keeping close tabs on significant developments. Please feel free to contact me with any questions or legal needs related creditor/debtor disputes.
The Forbes article can be found here.