(CNN) — Bed Bath and Beyond is closing another 87 stores as the struggling retailer barrels toward bankruptcy.
These closures are in addition to the 150 closures Bed Bath and Beyond announced last August. Included in the new list are five buybuy Baby locations and all 49 remaining Harmon Face Value stores, which sold cosmetics, plus several of the retailer’s flagship-brand stores across the country.
“As we continue to work with our advisors to consider multiple paths, we are implementing actions to manage our business as efficiently as possible,” a Bed Bath and Beyond spokesperson told CNN. “This store fleet reduction expands the company’s ongoing closure program.”
A company spokesperson also confirmed Wednesday night that it missed a bond payment on Feb. 1, and that it entered a month-long grace period. Debtors will often have a 30-day grace period to make payments before they enter default.
“We are committed to updating all stakeholders on our plans as they develop and finalize,” the spokesperson said.
The spokesperson did not confirm the amount Bed Bath and Beyond owes. However, the Wall Street Journal reported Bed Bath and Beyond “failed to pay more than $28 million on three tranches of notes totaling roughly $1.2 billion due on Feb. 1.”
Founded in 1971, Bed Bath & Beyond became a staple for affordable home decor, kitchenware and college dorm room furniture. The retailer became known for its ubiquitous 20% off blue coupons, and cavernous stores with merchandise stacked high to the ceilings. Bed Bath grew its corporate footprint aggressively, peaking at 1,552 stores in 2017.
But it struggled to make the transition to online shopping and to fend off larger chains like Walmart and Target. The retailer started making small trims in 2018 and, in the first year of the pandemic, started closing hundreds of stores, primarily its Bed, Bath and Beyond operations, and getting rid of some of its weaker brands, such as its Christmas Tree Shops.
As of last February, the company had 953 stores left, and it has announced plans to close more than 200 additional stores since then.
The closings not only reduced employee head count and salary expenses, but also the rent it pays. The company’s total store square footage fell by 36% in the four fiscal years ending in February in 2022.
But few troubled retailers have turned around long-term problems through store closings alone. Closings not only reduce costs, they reduces sales. Still, for a cash-starved company, like Bed, Bath and Beyond, the liquidation of inventory can help to raise the cash it needs to help fund operations through a reorganization.
Last week, the company warned in a regulatory filing that it received a notice of default from its lender, JPMorgan Chase. The company said that “at this time, the company does not have sufficient resources to repay the amounts under the credit facilities and this will lead the company to consider all strategic alternatives, including restructuring its debt under the US Bankruptcy Code.”
Bed Bath and Beyond defaulted “on or around” Jan. 13, according to the Securities and Exchange Commission filing. It could be forced to file for Chapter 11 bankruptcy reorganization due to its financial woes.
These are the locations Bed Bath and Beyond plans to close in the coming weeks in Illinois:
- 9650 South Ridgeland Avenue in Chicago Ridge, Illinois
- 5786 Northwest Highway in Crystal Lake, Illinois
- 215 Harlem Avenue in Forest Park, Illinois
- 1584 South Randall Rd. in Geneva, Illinois
- 3232 Lake Ave., Suite 125 in Wilmette, Illinois