Bed Bath & Beyond Files for Bankruptcy
“The allure of having the Willy Wonka golden ticket — or blue ticket — was gone,” he said.
In August, the company announced an aggressive restructuring plan, saying that it would close 150 stores and lay off more workers. Ms. Gove, the interim chief executive after Mr. Tritton left in June, said she was personally calling vendors to reassure them that Bed Bath & Beyond would pay them what it owed.
Just a few days after the restructuring announcement, the retailer was thrown into emotional tumult when its chief financial officer, Gustavo Arnal, died. Mr. Arnal’s death was ruled a suicide, according to the New York City Medical Examiner’s Office.
Bed Bath & Beyond’s suppliers started to get spooked and began demanding payment upfront. That led to in-stock levels around 70 percent during the past holiday season, according to Ms. Gove, who became permanent chief executive in October.
In early February, the company sidestepped bankruptcy after coming up with a plan to use a public stock offering to raise more than $1 billion. The plan, backed by Hudson Bay Capital Management, was only good so long as Bed Bath & Beyond’s stock stayed above $1 a share. This month, Bed Bath & Beyond canceled that deal after its terms were breached. Its stock closed at 29 cents a share on Friday.
All the while, sales continued to fall, starving the company of the cash — and confidence — necessary to keep suppliers shipping to its stores.
“It’s a death spiral,” Neil Saunders, the managing director at GlobalData’s retail division, said. “If you can’t get the stock, you can’t make the sales. If you can’t make the sales, your credit deteriorates. If your credit deteriorates, people are less willing to supply you. That cycle seems impossible to break.”
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