America’s leading specialty baby products retailer will shutter its 120 stores, a consequence of parent company Bed Bath & Beyond’s bankruptcy filing on Sunday.
buybuy BABY and its website will remain open for now, along with 360 Bed Bath & Beyond stores, as the company secured a $240 million loan to help fund its operations during bankruptcy.
Store closing sales will start Wednesday, as the company is using Chapter 11 proceedings to put itself up for sale. It said if it succeeds in finding a buyer, the company will “pivot away” from store closings.
If a buyer does not appear for all or parts of its business, Bed Bath & Beyond will most likely be liquidated entirely and go out of business.
Neil Saunders, a retail analyst and managing director at GlobalData Retail, said Bed Bath & Beyond will be a “shadow of its former self” if it emerges from bankruptcy.
“The buybuy BABY business is the one part of the operation that will probably attract interest from buyers,” Saunders said.
Saunders said the former retail giant could move online only, but it could “mean reduced visibility and a much more difficult trading model from a profit perspective.”
Bed Bath & Beyond acquired buybuy BABY for $67 million in 2007. At the time, the chain operated eight stores in New York, New Jersey, Maryland and Virginia. The baby and toddler stores were founded in 1996 by Richard and Jeffrey Feinstein, the sons of Bed Bath & Beyond’s co-founder. It was among the stores the firm acquired in the 2000s: Harmon Stores, Christmas Tree Shops, buybuy BABY and Cost Plus World Market.
Bed Bath & Beyond placed some hope in buybuy BABY while it struggled to survive. Ryan Cohen, former activist investor in the company, said in a March 2022 letter that buybuy BABY was worth more than Bed Bath & Beyond’s entire market capitalization and should be considered to spun off or look to find a buyer to take the whole company private.
Last year, Bed Bath & Beyond’s former CEO Mark Tritton said a bright spot in the company was its wedding and baby categories, noting an uptick in those sales in the beginning of 2022.
Tritton was fired last June after only three years leading the sinking company. He joined Bed Bath & Beyond in 2019 from Target, where he was in charge of expanding its private label brands.
Yet the company already closed five buybuy Baby locations earlier this year.
In its bankruptcy filing, Bed Bath & Beyond said it had $5.2 billion in debt and assets of just $4.4 billion. The rise of online shopping and the popularity of Walmart
(TGT) and Costco
(COST), which drew away customers with lower prices and a wider array of merchandise, helped lead to the chain’s demise.
“Thank you to all of our loyal customers. We have made the difficult decision to begin winding down our operations,” a statement at the top of the company’s website said Sunday morning.