Bed Bath & Beyond hires AlixPartners as bankruptcy looms

Bed Bath & Beyond has hired turnaround and restructuring consultancy AlixPartners amid preparations for bankruptcy protection, people familiar with the matter told Reuters.

The beleaguered home goods retailer has also hired restructuring lawyers at Kirkland & Ellis and investment bankers at Lazard, the source said.

AlixPartners, a prominent firm in the turnaround space, will advise the retailer on the options it has for addressing its financial concerns. Bed Bath & Beyond told Reuters on Thursday that it was "working with strategic advisors to evaluate all paths to regain market share and enhance liquidity."

The Union, NJ-headquartered retailer on Thursday told investors that weak sales and slower foot traffic had forced it to consider options for restructuring – including bankruptcy protection.

Bed Bath & Beyond in August announced a previous plan that included 150 store closings, cost reductions, and layoffs. The firm had 32,000 employees as of February and in October said it had closed half of the selected stores in its restructuring plan.

The company was hoping the holiday season would lift its fortunes. The quarter that ended Nov.26 – which includes the run-up to Black Friday – had sales of $1.3 billion, approximately a third lower than last year when it had more stores.

Bed Bath & Beyond estimated a loss of $386 million in its latest quarter, a substantial increase from the $276 million loss in the same quarter last year. The company said it would report its full third quarter results on Tuesday.

The Reuters source said the company is considering skipping a $1.5 billion debt payment due February 1 in an effort to preserve cash. This would likely trigger a 30-day grace period before an official default.

In addition to bankruptcy protection, the retailer is examining options that include selling all or part of the company. The company’s valuable Buy Buy Baby brand is likely to generate the most interest from purchasers.

AlixPartners has worked with several other large retailers since the beginning of the pandemic, which has worn down and toppled numerous bricks-and-mortar brands struggling with supply chain woes, increased costs, and a continuing shift to online. The consulting firm has advised clients including JC Penney, Nordstrom, and Macy’s.