Bed Bath & Beyond continues to shrink its store footprint.
The embattled home goods chain, which last week sounded another warning that it considering filing for bankruptcy, is closing all its Harmons health and beauty stores — about 50 locations in all — and has initiated the closing of an additional 87 Bed Bath & Beyond stores. Five Buybuy Baby stores are also on the cutting list.
The new round of closings are in addition to the 150 poor-performing Bed Bath & Beyond stores that the company said in August that it planned to close. (Click here for a list, updated as of January 2023, of the store closings that were part of the initiative.)
"As we continue to work with our advisors to consider multiple paths, we are implementing actions to manage our business as efficiently as possible," Bed Bath & Beyond Inc. wrote in a statement emailed to Chain Store Age. "This store fleet reduction expands the company’s ongoing closure program of approximately 150 lower-producing Bed Bath & Beyond banner stores. Additionally, the company announced the closure of all Harmon locations. We will update all stakeholders on our plans as they develop and finalize."
Harmon, which was founded in 1971, was acquired by Bed Bath & Beyond in 2002. The stores sell a mix of health and beauty items, ranging from cosmetics and hair care to health care products such as vitamins and headache remedies. A limited assortment of general merchandise items are also featured, including candy, paper goods and other household staples. The majority of Harmon stores are located in New Jersey and New York.
As of late November, the retailer had 949 stores, including 762 Bed Bath & Beyond stores, 137 Buybuy Baby stores, and approximately 50 stores operating under the names of Harmon, Harmon Face Values or Face Values.
With the news of yet more closings, Bed Bath & Bath appears to be moving closer to bankruptcy. In an SEC filing last Thursday, the company said it didn’t have cash to pay down its debt. (On Thursday, Bed Bath & Beyond said it received a default notice from JPMorgan Chase & Co. after it overdrew on its credit lines.). As of March, the company had about $3 billion in debt.
“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 U.S. Bankruptcy Code,” Bed Bath & Beyond stated in the filing.
In the filing, the company said it is taking a number of actions to improve its financial position, including cost-cutting, lowering capital expenditures, and reducing its store footprint and related distribution centers.
In addition, Bed Bath & Beyond said it will continue to seek reductions in rental obligations with landlords in its determination of the appropriate footprint, seek additional debt or equity capital, reduce or delay the company's business activities and strategic initiatives or sell assets. It warned, “these measures may not be successful.”
Bed Bath & Beyond also said Thursday that it has Carol Flaton to its board. Flaton is a restructuring professional who previously worked at AlixPartners and Lazard.