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Bed Bath & Beyond files for bankruptcy protection, but stores and websites to remain open

Bed Bath & Beyond, the home goods chain that has been struggling for years, has filed for bankruptcy protection. The company announced on Sunday that it had voluntarily filed for Chapter 11 bankruptcy in U.S. District Court in New Jersey after it failed to secure funds to stay afloat. The company listed its estimated assets and liabilities in the range of $1 billion and $10 billion. Despite the bankruptcy filing, Bed Bath & Beyond's 360 stores and 120 Buy Buy Baby stores will remain open and continue serving customers as the company begins the process of closing its retail locations.

The filing is the latest chapter in the company's long-running struggles. Bed Bath & Beyond has been grappling with a prolonged sales slump, struggling to attract customers both in stores and online. As the company faded, experts pointed to a number of strategic missteps by its previous management, including a slow shift to e-commerce, introducing private label products that few customers wanted, and buying back too much of its own stock.

The company's troubles have been compounded by the COVID-19 pandemic, which has accelerated the shift to e-commerce and put further pressure on traditional retailers. Earlier this year, Bed Bath & Beyond announced it would be shuttering 87 stores in 2023 in an effort to stave off bankruptcy. The chain closed 150 locations last year, while laying off thousands of workers.

Bed Bath & Beyond opened as a privately held business in 1971 and went public in 1992. As the U.S. economy boomed, the company had a 15-year run of earnings that met or beat Wall Street expectations. But its momentum slowed with the explosion of online shopping. E-commerce was already taking off by the early 2000s, and consumers embraced online shopping for home goods starting around 2010. Bed Bath & Beyond finally hopped on the e-tailing bandwagon after naming Mark Tritton, a former top Target executive, CEO in 2019. But by then the company was nearly a decade behind leaders in the field.

In a last-ditch move, the company tried to raise $1 billion in February by selling more shares in a public offering, with executives saying the cash would help avoid bankruptcy and pay down debt. But the effort proved a dud with investors.

For a time, Bed Bath & Beyond surged last year as Ryan Cohen, the billionaire founder of online pet food company Chewy, bought more than 7 million shares in the company and retail investors turned the company into a so-called meme stock. Cohen sold his holdings last summer in a move that netted him $178 million while triggering a selloff.

The bankruptcy filing will allow Bed Bath & Beyond to restructure its operations, reduce its debt load, and focus on its core business. The company said it intends to uphold commitments to customers, employees, and partners during the restructuring process.

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