According to a court filing on Friday, Bed Bath & Beyond is closing all of its stores in Canada.This comes just two days after the company’s US division announced that it had raised enough funds to avoid bankruptcy.
According to the court filing, which was posted on the website of consulting firm Alvarez & Marsal, “The Bed Bath & Beyond Group has been in financial difficulty for several years, suffering significant net losses since 2018.” According to the filing, despite efforts to improve financial performance, the pandemic and the current economic downturn disrupted operations and put them in financial jeopardy.
The company will close all 54 Bed Bath & Beyond locations in Canada and lay off 387 full-time and 1,038 part-time employees.
Its sister store, buybuy BABY Canada, will also close its doors.
Despite raising $1 billion to avoid bankruptcy, Bed Bath & Beyond will begin closing operations in Canada, claiming that there is insufficient capital to save both its U.S. business and its subsidiary.
The Ontario Superior Court of Justice granted Bed Bath & Beyond Canada an initial order for creditor protection on February 10 under the Companies’ Creditors Arrangement Act, which is essentially Canada’s equivalent of Chapter 11 bankruptcy. According to the order, the Canadian division, which includes 54 Bed Bath & Beyond stores and 11 Buybuy Baby stores, will now initiate creditor protection proceedings to allow for a timely wind-down of operations and inventory liquidation.
According to the filing, the Canadian company is bankrupt and unable to restructure its operations without the assistance of its American parent company.
Despite its recent equity raise, the Union-based home goods retailer is faced with “extremely limited funding and significant constraints on its use of cash,” and thus unable to continue turnaround efforts in the United States while attempting to “properly resuscitate the Canadian business,” according to the order.
Despite launching a turnaround strategy in August 2022 that called for the closure of 150 underperforming stores and the layoff of 20% of its corporate and supply chain workforce, Bed Bath & Beyond is still grappling with mounting debt and losses, prompting the chain to try to conserve cash.
Bed Bath & Beyond announced last week plans to close 150 more stores, on top of the 250 previously announced closures, with a total of 480 locations remaining open — 360 of its namesake stores and 120 Buybuy Baby stores.
Bed Bath & Beyond has closed 400 stores in the last year, accounting for nearly half of the 950 locations that were open in February 2022.