Union, N.J. – A last-minute buyer. More store liquidations. A potential buybuy Baby sell-off. All are possibilities as Bed Bath & Beyond faces an imminent bankruptcy filing, according to reports from Reuters and the Wall Street Journal.
“Bed Bath & Beyond Inc. is preparing to seek bankruptcy protection as soon as this week, and has lined up liquidators to close additional stores unless a last-minute buyer emerges,” sources told Reuters yesterday.
The company is required to make interested payments on its outstanding debt on Feb. 1 and it has to fund payroll at the end of this week, the Journal noted.
“Skipping the payments doesn’t automatically trigger bankruptcy but it typically starts a grace period, a time in which companies discuss repayment options or seek alternate arrangements before bondholders and other creditors can take legal action,” the Journal reported.
Investment firm Sixth Street, which loaned BBB $375 million last year, is negotiating a loan related to bankruptcy proceedings, according to Reuters.
In addition, Bed Bath & Beyond has liquidators at the ready to begin GOB sales at stores by this weekend, the news agency was told.
“[Reuters’ sources] cautioned that a last-minute buyer for the chain could emerge, or it could still ink a deal for its brands such as buybuy Baby. Prospective buyers sometimes wait until a company files for bankruptcy before agreeing to purchase assets, hoping to negotiate more favorable terms,” Reuters reported.
In recent days, the company added 87 Bed Bath & Beyond stores and 5 buybuy Baby units to the list of 150 closings it began scheduling last year. The company also abruptly pulled the plug on its Harmon health & beauty chain, whose 52 locations are going dark.