Bed Bath & Beyond looks for capital infusion, buyer ahead of likely bankruptcy filing

Bed Bath & Beyond has been successful discussions with prospective buyers and lenders arsenic it works to support its concern afloat during a apt bankruptcy filing, according to radical acquainted with the matter.

The retailer is successful the midst a merchantability process successful hopes of uncovering a purchaser that would support the doors unfastened for some of its large chains, its namesake banner and Buybuy Baby, said the people, who weren't authorized to sermon the substance publicly.

At the aforesaid time, Bed Bath has besides been looking for a lender to supply financing that would support the institution going if it were to record for bankruptcy extortion successful the coming weeks, the radical said.

A Bed Bath spokeswoman said Wednesday the institution doesn't remark connected circumstantial relationships but has been moving with strategical advisers to measure each paths to regain marketplace stock and heighten liquidity.

"Multiple paths are being explored and we are determining our adjacent steps thoroughly, and successful a timely manner," the spokeswoman said, declining to remark further.

A typical for AlixPartners, which CNBC precocious reported was hired arsenic the company's advisor, declined to comment.

Earlier this period Bed Bath warned it whitethorn request to record for bankruptcy aft its turnaround plans failed to substantially boost income and repair its equilibrium sheet. The institution reported nett losses that transcend $1.12 cardinal for the archetypal 9 months of the fiscal year. It's blown done its liquidity successful caller months, shouldered a dense indebtedness load, and faced strained relationships with its suppliers.

Comparable income declined 32% twelvemonth implicit twelvemonth successful the astir caller fiscal quarter, ended Nov. 26. Company leaders said the institution has had a harder clip keeping shelves stocked, arsenic vendors alteration outgo presumption oregon determine not to vessel merchandise due to the fact that of the retailer's fiscal challenges.

Last week, CNBC reported Bed Bath had begun different circular of layoffs successful an effort to further chopped costs. The institution had astir 32,000 employees arsenic of Feb. 26, 2022, according to nationalist filings.

The institution has been moving to find a way that sees its chains survive, the radical added. A time earlier Bed Bath issued a "going concern" warning, it announced successful an worker memo that it had hired Shawn Hummell, a erstwhile Macy's executive, to pb its namesake brand's retail, store operations and merchandising operations arsenic elder vice president of stores. Prior to his clip astatine Macy's, Hummell worked for Abercrombie & Fitch, different retailer that underwent a turnaround.

One imaginable purchaser circling Bed Bath is backstage equity steadfast Sycamore Partners, according to the radical acquainted with the discussions. Sycamore is peculiarly funny successful Buybuy Baby, Bed Bath's banner for infants and toddlers, which has outperformed the broader company. Buybuy Baby has been deemed astir apt to past going forward, the radical said.

Still, a merchantability of Bed Bath arsenic a full remains connected the array — albeit with a overmuch smaller footprint of stores than it presently has, the radical said.

Sycamore is known for acquiring retailers, similar women's apparel concatenation Talbots, including distressed companies that person sought bankruptcy attraction similar Ascena's Ann Taylor. A Sycamore Partners spokesperson declined to comment. Dealbook antecedently reported Sycamore's involvement successful Buybuy Baby.

Bed Bath has besides drawn involvement from companies that get the intelligence property, oregon brands, of companies, peculiarly those nether distress, the radical said. Authentic Brands, which has frequented galore bankruptcy-run income for retailers similar Forever 21, has besides been looking astatine Bed Bath, the radical said. A typical for Authentic Brands didn't instantly respond to comment.

Short of a sale, the institution and its advisors person been looking to nail down further financing for a bankruptcy filing, which could hap successful the coming weeks, the radical said. The company's advisors are looking for a indebtedness of astatine slightest $100 million, 1 of the radical said.

Last year, Bed Bath received $375 cardinal successful caller backing from lender Sixth Street Partners, which has provided financing to different retailers similar J.C. Penney and Designer Brands.

Sixth Street's installation could beryllium converted into bankruptcy financing, the radical said, oregon the lender oregon others could person their indebtedness to equity and go Bed Bath's owner. A typical for Sixth Street didn't instantly respond to comment.

Bed Bath's financing strategy comes arsenic chap retailer Party City sought Chapter 11 protection this week. Also with a hefty indebtedness load, Party City is looking to restructure its equilibrium expanse and determination guardant with a smaller footprint.

Bankruptcy lawyer Eric Snyder from instrumentality steadfast Wilk Auslander said a merchantability was unrealistic for Bed Bath owed to its declining income and inventory, arsenic good arsenic its expanded losses.

"They don't person the availability to close the ship, and they don't person the currency to proceed to operate," Snyder said. "I conscionable don't spot immoderate different enactment different than a bankruptcy and a liquidation."

—CNBC's Melissa Repko contributed to this report.