Bed, Bath, and Goodbye: Home Goods Company Says It Could Go Bankrupt. And Inventory Is Low.

The popular retail chain is staring down financial failure.

learn more about Gabrielle Bienasz

By Gabrielle Bienasz

Bloomberg / Contributor I Getty Images
Bloomberg store closing sale in September.

Bed Bath & Beyond said in a filing with the Securities and Exchange Commission (SEC) on Thursday that it is doubtful it could continue operating the business — i.e., the company is staring down bankruptcy.

Based on "recurring losses and negative cash flow from operations… as well as current cash and liquidity projections, the Company has concluded that there is substantial doubt about the Company's ability to continue," it wrote in the filing.

Still, the company is trying to get out of the hole.

But according to Insider, there's another problem: Inventory levels are low, with stock at 53% for the end of last month, compared to 61% at Kohl's for example, per DataWeave, an e-commerce analytics company.

This was due to Bed Bath & Beyond's lack of credit to purchase inventory, said Bobby Griffin, an analyst at Raymond James, per Insider.

It's a vicious cycle — low inventory could mean lower sales.

After 27 years of positive growth, Bed Bath & Beyond began to have problems in 2018, per a podcast from The Wall Street Journal. The chain was founded in 1971.

A new CEO, Mark Tritton, who took over the chain in 2019, focused on "private label" brands made by the store itself and hurried a host of them to market. During the home goods boom of 2020, sales were up, seeming to advocate for his strategy.

Then, later in 2021, sales began to tank. The products, as the podcast noted, were not well thought out nor of high quality. Tritton was pushed out in June.

Bed Bath & Beyond now has some $3 billion in debt on its balance sheet as of March, per The New York Times, and is low on cash and time for new CEO, Sue Gove, to make large-scale changes.

The company also announced in September it would cut 20% of jobs and close 150 stores. The holiday season didn't provide hoped-for capital to rescue the business, one expert told the paper.

"Before Christmas, there was just a glimmer of hope," said Neil Saunders, managing director of GlobalData, per the outlet. But, he added, "things have just got worse."

The company in its preliminary quarterly data said it expected to report a $385.8 million loss for the quarter ending in November 2022.

The company also had a meme stock moment, where renegade investors take on a stock that is not performing well and kick Wall Street in the process, in August 2022 and in 2021, but the company's stock is way back down to earth, trading at just $1.31 a share Friday afternoon, compared to $13.80 around this time last year.

And things in stores are not looking good, as Insider noted. The company has just 39% inventory availability in lighting and kitchen. The company also cited inventory issues as a reason it is considering bankruptcy in its SEC filing.

Bankruptcy, however, could still mean the chain sticks around. The process often gives companies a chance to restructure.

"What we've seen many times is that it ends up being a stay of execution," Michael Baker, who studies retail at investment banking firm D.A. Davidson, told The New York Times.

"Sometimes that works, but oftentimes you see an announcement of scaling back and having fewer stores, and then that's followed by a complete liquidation," he added.

Gabrielle Bienasz

Entrepreneur Staff

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

Related Topics

Editor's Pick

This 61-Year-Old Grandma Who Made $35,000 in the Medical Field Now Earns 7 Figures in Retirement
A 'Quiet Promotion' Will Cost You a Lot — Use This Expert's 4-Step Strategy to Avoid It
3 Red Flags on Your LinkedIn Profile That Scare Clients Away
'Everyone Is Freaking Out.' What's Going On With Silicon Valley Bank? Federal Government Takes Control.

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Celebrity Entrepreneurs

'I Dreaded Falling in Love.' Rupert Murdoch Is Getting Hitched for the Fifth Time.

The 92-year-old media tycoon announces he will wed former San Francisco police chaplain Ann Lesley Smith.


Having Trouble Focusing? Here's How to Become Unstoppable in Your Performance

Here are a few tips on how to improve your focus, discipline and ability to complete projects.

Business Ideas

55 Small Business Ideas To Start Right Now

To start one of these home-based businesses, you don't need a lot of funding -- just energy, passion and the drive to succeed.

Starting a Business

Selling Your Business? Do These 6 Things Right Now.

If you want the maximum price you need to make these moves before you do anything else.


How Great Entrepreneurs Find Ways to Win During Economic Downturns

Recessions are an opportunity to recalibrate and make great strides in your business while others are unprepared to brave the challenges. Here's how great entrepreneurs can set themselves up for success despite economic uncertainty.