Bed Bath & Beyond is supposed to be dead. It was overwhelmed by aging stores, poor inventory selection, a revolving door of executives, store closures, collapsing sales and a heavy debt load. Suddenly, the retailer may be resurrected. (These companies have the worst reputations.)
According to The Wall Street Journal, Sixth Street Partners, the senior lender to Bed Bath & Beyond, may buy some of the company’s assets out of Chapter 11. “Sixth Street, the retailer’s biggest lender, could seek to acquire the Buybuy Baby chain or all of the retailer’s assets out of bankruptcy,” says the report. A company called Go Global Retail also may make a run at some assets.
There is precedent for what could happen to Bed Bath & Beyond, although past similar efforts have usually been unsuccessful. RadioShack and Toys ‘R’ Us were briefly brought back to life. Each had been highly successful during its best year.
One has to wonder what is left of Bed Bath & Beyond at all. Some stores that have not been abandoned and taken over by property owners? A small amount of inventory that has not been liquidated? Employees and senior management who have been fired?
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What is left for certain is the Bed Bath & Beyond brand. The company was started in 1971. It had over 1,000 stores at the turn of the past decade, and it was a publicly traded company.
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Among the advantages a new owner would have is that Chapter 11 would have gotten rid of debt, which was a primary reason Bed Bath & Beyond went under.
Any firm wanting to buy Bed Bath & Beyond needs to consider that successful turnarounds of dead retailers rarely have been successful, if they ever have. A buyer may be investing good money to get nothing.
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