Bed Bath & Beyond is shrinking its brick-and-mortar footprint even further.
The struggling home goods retailer plans to close 150 more stores, on top of 250 previously announced closures, and ultimately plans to keep 480 locations open — 360 of its namesake store and 120 Buybuy Baby stores, Bed Bath & Beyond said in a Feb. 7 press release.
Chief Executive Officer and President Sue Gove said the decision was made as part of the company’s turnaround plan, which is focused on optimizing store footprint, investing in inventory and pursuing infrastructure improvements.
“In response to evolving shopping preferences today, this target store base includes the company’s most profitable locations and best geographic presence for customers that can enable an optimal omnichannel experience,” Gove said. “The digital channel is expected to rise to a higher proportion of sales with improved channel profitability.”
The news comes a week after the company announced the closure of 87 Bed Bath & Beyond stores, five Buybuy Baby locations and its entire chain of 50 Harmon Face Value stores.
It also comes as Bed Bath & Beyond said it struck a deal to raise enough funding to stave off a bankruptcy filing, for now.
After closing an underwritten public offering, the company said it secured $225 million and anticipates receiving an additional $800 million in future installments. The retailer unveiled plans Feb. 6 for a public offering and said it aimed to raise as much as $1.025 billion through an equity offering, in addition to tapping $100 million from its credit line, to repay outstanding loans.
The capital raise, which is expected to help the company make debt payments and continue operations for now, comes a month after Bed Bath & Beyond warned it is teetering on the edge of bankruptcy.
Gove described it as a “transformative transaction” that will “provide runway” as the company tries to improve its business.
“We continue to put our customers at the center of every decision, positioning Bed Bath & Beyond to meet and exceed their expectations, while resetting our foundation for near- and long-term success,” she said. “We are optimizing our store fleet and supply chain and continuing to invest in our omni-always capabilities. This will enable us to better serve our customers, and grow profitably, by directing merchandise where and how they want to shop with us. We are also prioritizing availability of leading national and emerging direct-to-consumer brands our customers know and love. As we make important strategic and operational changes, we will continue to take disciplined steps to enhance our cost base and improve our financial position.”
After struggling in recent years to turn itself around amid inventory outages, declining sales and fewer shoppers, the retailer said it is considering Chapter 11, as well as other strategic alternatives, including restructuring or refinancing debt, seeking additional debt or equity capital, pulling back on or delaying business activities, or selling assets.
Despite introducing a turnaround strategy in August 2022 that called for closing 150 lower-performing stores and laying off 20% of its corporate and supply chain workforce, Bed Bath & Beyond continues to wrestle with mounting debt and losses, prompting the chain to try and conserve cash.
Bed Bath & Beyond’s retail presence has already shrunk dramatically, according to a Feb. 6 regulatory filing. The latest closings mean Bed Bath & Beyond will have shuttered 400 stores in the past year — almost half of the 950 locations that were open in February 2022.
According to Gove, the company will also pursue “asset-light inventory management strategies to drive growth, including vendor-direct-to-consumer, marketplace, and the potential for innovative collaborations.”
Additionally, Bed Bath & Beyond will look to streamline supply chain, technology, expense structure and business processes as it realigns operational foundation and believes the changes will help strengthen business partnerships with suppliers, real estate, and service partners, she said.
Gove said, “Our board and management, working closely with advisors, evaluated every strategic alternative available to us to reach the appropriate solution to maximize prospects for all stakeholders in our pursuit of long-term value creation. We are determined to achieve our goals and we are grateful to our thousands of associates and many partners for their dedication to our beloved brands, Bed Bath & Beyond and Buybuy Baby.”
Bed Bath & Beyond also named Holly Etlin as its interim chief financial officer, replacing Laura Crossen, who was appointed in September 2022 after the death of Gustavo Arnal.
Etlin’s 30 years of experience included serving as chief restructuring officer at Tailored Brands and as a managing director at AlixPartners.