Bed, Bath & Beyond is permanently closing all of its stores in Canada – and it comes just days after the retailer raised enough money to avoid bankruptcy.
A court filing on Friday, February 10, revealed that the Canadian division of the retailer is insolvent, which means it is unable to continue to operate as a business.
Because of this, as many as 54 Bed, Bath & Beyond stores in Canada will close permanently, along with 11 buybuy BABY stores.
The court filing, shared via consultancy firm Alvarez & Marsal, says, "The Bed, Bath & Beyond Group has been in financial difficulty for the past several years, suffering significant net losses since 2018."
It continues, "Over this period, BBB Canada itself has seen dramatic declines in revenues."
According to the court filing, former management made several attempts to turn things around for the company. However, the COVID-19 pandemic and the broader economic downturn put "further financial strain on the entire enterprise."
Things got worse in 2022, per the documents. Among the contributing factors were credit rating downgrades, inventory reductions, cash constraints and delays to merchandise shipments.
Although there was an improvement last summer thanks to an "aggressive campaign to preserve cash, reduce costs and strengthen the balance sheet," the sudden death of the retailer's chief financial officer (CFO) left the company "with a significant leadership gap" at a critical point.
By January 2023, the court filings say there was "substantial doubt" that the business would be able to continue to operate.
Although the company was recently able to raise around $1 billion through offering of stock and warrants, according to CBC News, it has not been enough to prevent closures.
Instead, the money will be used to pay off the retailer's debts.
As of January 31 in Canada, Bed, Bath & Beyond employed just under 400 people full-time, in addition to 1,038 part-time workers.
Over in the United States, parent company Bed Bath & Beyond Inc. continues to shut down large numbers of stores all over the country.
In December, it warned that it may need to file for bankruptcy protection.
Bed, Bath & Beyond is just one of a long list of big-name brands that have either scaled back or fully shut down stores in Canada in the wake of the COVID-19 pandemic.
Among them are The Disney Store, Starbucks, Gap and NYX Cosmetics.
This article's cover image was used for illustrative purposes only.