Bed Bath & Beyond store closures include 6 in Southern California

Bed Bath & Beyond‘s downward slide continued Tuesday as the company announced 126 of its 150 planned store closures, including locations in Valencia, Palmdale, Burbank, La Habra, Lakewood and Buena Park.

A timeline has not been given for when the stores will close.

Additional locations were closed last year in Laguna Nigel, Rancho Santa Margarita and Tustin. The closures are part of a plan to try to stabilize the company’s finances and turn around its declining sales.

In August, the home goods retailer secured more than $500 million in new financing and announced it would close 150 of its stores and slash its workforce by 20%. The company said Tuesday it was on track to meet that goal and hinted the strategy likely will involve bankruptcy.

As of Feb. 26, 2022, the company had about 32,000 employees.

Bed & Bath’s options in Chapter 11 include pursuing a sale of either its baby clothing, accessories and furniture brand, or the whole company, as well as seeking additional financing from new or existing investors to help it turn the business around.

Aside from its namesake brand, the retailer had 135 Buybuy Baby stores and 51 locations under the Harmon, Harmon Face Values or Face Values banners at the end of the first quarter of fiscal 2022.

It also opened five Buybuy Baby stores in that three-month period ending May 28 last year.

Any path the company chooses will likely include more store liquidations and layoffs, according to Bob Phibbs, CEO of The Retail Doctor, a New York-based retail consulting firm.

“If they file for bankruptcy, they’ll come out of it, even if they have to cut their store fleet in half to succeed,” he said. “I don’t see anyone else coming in to take it over. They’ll look to where most of their online sales and store volumes are coming from and they’ll keep those.”

The company operates 708 Bed Bath & Beyond locations in the U.S., including 69 in California, according to ScrapeHero, a data-gathering firm.

Bed Bath & Beyond initiated a turnaround plan in the third quarter of fiscal 2022, but it failed to gain enough traction, according to President and CEO Sue Gove.

“Although we moved quickly and effectively to change the assortment and other merchandising and marketing strategies, inventory was constrained and we did not achieve our goals,” Gove said in a statement.

The retailer posted a net loss of nearly $393 million in its fiscal third quarter, deeper than the $276.4 million loss posted a year earlier.

“Multiple paths are being explored and we are determining our next steps thoroughly, and in a timely manner,” Gove said.

Sales slid 33% to $1.26 billion for the three months ending Nov. 26, compared with $1.88 billion a year earlier. And sales at stores open at least a year — a key gauge of a retailer’s health — dropped 32%.

Phibbs said the company’s momentum began to wane when Mark Tritton, the former chief merchandising officer at Target, took over as CEO in 2019.

“He stopped their coupons and they lost of a lot of business,” Phibbs said. “Customers voted with their feet.”

In June 2022, the company announced Tritton was out and Gove subsequently took the helm.

While the company’s recent quarterly performance was not a surprise given Bed Bath & Beyond’s update on its results last week, Neil Saunders, managing director of GlobalData, said in a statement that it’s still a bit of a shock and only adds to concerns about the company’s survival.

“A third of revenue has vanished, plunging an already beleaguered company into the depths of chaos,” he said.

Bloomberg contributed to this report.

Source: Orange County Register