BBBY: Bed Bath & Beyond To Shutter Canadian Operations After Filing For Creditor Protection

The end of Bed Bath & Beyond (NASDAQ: BBBY) has begun, with the Canadian arm of the retailer making a relief filing under the Companies Creditors Arrangement Act, also known as a CCAA filing. The filing is the Canadian equivalent of bankruptcy protection.

In making the filing, BBB Canada indicated that it has had financial difficulty within Canada since at least 2018, with revenues declining dramatically in the years since. The firm blamed the downturn on both the pandemic, despite it beginning two years after struggles began for the company, as well as on the “broader economic downturn.” Those two factors are said to have hindered the “transformation efforts of management.”

The company reportedly had assets of $480.1 million as of November 26, with liabilities of $429.7 million. The entity reported a net loss of $99.5 million for the nine months ended November 26, 2022 across its two retail banners, Bed Bath & Beyond and buybuy BABY, while EBITDA amounted to negative $92.2 million.

While the firm thought it was on track to turn itself around, this was further hindered by the death of the firms Chief Financial Officer, Gustavo Arnal, who died suddenly following a fall from the 18th floor of a Manhattan office building in early September. His death is said to have left a “significant leadership gap at a critical juncture.”

READ: BBBY: Bed Bath & Beyond CFO Reportedly Falls From 18th Floor Of Manhattan Tower

In the time since, Bed Bath & Beyond, the US parent of BBB Canada, has reportedly considered filing for bankruptcy for weeks now after defaulting on its debt in mid-January. Subsequently, the firm is also reported to have missed making several interest payments, although that claim has been disputed by several debtholders whom claim they were paid.

READ: BBBY: Bed Bath & Beyond Fails Interest Payment As Bankruptcy Looms, But Youtuber Claims They Paid

The impact of the filing

With its stateside operations failing at the same time as its Canadian operations, the company stated, “there is not enough capital available to restructure both its business in the United States and properly resuscitate the Canadian business to achieve profitability.” Furthermore, the company indicated that it considered closing the lowest performing stores, however the “economics of doing so are not justifiable.”

With the filing being made for creditor protection, the decision will impact all 54 Bed Bath & Beyond store locations in Canada, along with 11 buybuy BABY retail locations. The company is said to have employed a total of 387 full-time associates, as well as 1,038 part-time associates as of January 31.

The company has requested creditor protection under the filing so that it “will have the breathing room to develop and conduct a controlled and orderly wind down of operations in Canada for the benefit of all stakeholders.”

An initial order for creditor protection was granted by the Ontario Superier Court of Justice on Friday.

Bed Bath & Beyond last traded at $2.35 on the Nasdaq.

Information for this briefing was found via court filings and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One thought on “BBBY: Bed Bath & Beyond To Shutter Canadian Operations After Filing For Creditor Protection

  • February 11, 2023 1:03 PM at 1:03 pm

    So, will the stores remain open to the public next week?


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