Without its corporate parent to support its unprofitable operations, Bed Bath & Beyond Canada is insolvent and will wind down, according to filings with the Ontario Superior Court of Justice posted by Alvarez & Marsal Canada, a consultancy that has been appointed monitor for the proceedings.
“The wind-down process must be commenced as soon as possible to maximize recoveries and limit costs by ensuring that BBB Canada can exit from all retail stores as soon as practicable and avoid further rent, employee costs, critical supplier/service provider fees, bank fees, and other ongoing amounts,” the retailer’s representatives noted in the filings.
Bed Bath & Beyond CEO Sue Gove last week hailed a last-minute infusion of funds from a stock offering, other stock-related proceeds and a loan that could raise $1 billion and give the near-bankrupt home goods retailer some hope of recovery. But its last-ditch turnaround plan no longer includes its Canada business, according to the Canadian court filings.
“After consideration of all strategic alternatives, the Bed Bath & Beyond Group has determined that it is no longer in a position to provide financial and operational support to BBB Canada,” per the filings. “BBB Canada does not have capacity or ability to independently effect a recapitalization or restructuring of the Canadian operations without access to cash and the support of BBBI and its lenders.”
Bed Bath & Beyond Canada operates 54 Bed Bath & Beyond stores and 11 BuyBuy Baby stores, with about 387 full-time employees and 1,038 part-time employees as of Jan. 31, according to court documents. The retailer also has leases for a now nearly empty 5,200 square foot warehouse in British Columbia and a corporate office in Ontario.
The retailer’s Canadian business hasn’t been profitable for some time, with “significant net losses” in the nine months ending Nov. 26 and net losses reported on its 2021 tax filings, according to the court filing.