Bed Bath & Beyond says it can no longer pay its debts
(CNN) -- The end could be near for struggling retailer Bed Bath & Beyond, as it warned in a regulatory filing Thursday that it received a notice of default from its lender, JPMorgan Chase. Shares of Bed Bath & Beyond (BBBY) plunged more than 20% on the news, to about $2.56 a share.
The company said in its SEC filing Thursday that "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 defaulted "on or around" January 13, according to the Securities & Exchange Commission filing. As a result, creditors are demanding immediate payment.
Bed Bath & Beyond could be forced to file for Chapter 11 bankruptcy reorganization due to its financial woes.
The company added that it is also cutting costs, lowering capital expenditures, and closing stores and distribution centers.
Founded in 1971, Bed Bath & Beyond became a staple for affordable home decor, kitchenware, and college dorm room furniture. The retailer became known for its ubiquitous 20% off blue coupons, and cavernous stores with merchandise stacked high to the ceilings.
But the company struggled to make the transition to online shopping and fend off larger chains such as Walmart (WMT) and Target (TGT). Many shoppers switched to those competitors as the novelty of Bed Bath & Beyond's coupons faded -- consumers can find plenty of cheaper alternatives on Amazon (AMZN) and other online sites.
The company was also hit hard during the pandemic, closing stores temporarily during 2020 while rivals remained open. The company lost 17% of its sales in 2020 and 14% in 2021.
Bed Bath & Beyond has rotated through several different executives and turnaround strategies in recent years, including former Target executive Mark Tritton, who left the company last year after less than three years as CEO.
As of February 2022, Bed Bath & Beyond had 950 stores and 32,000 workers. The company also owns children's retailer buybuy Baby.