Empty shelves. Dated merchandise. Sparsely populated stores.
(Bloomberg) — Empty shelves. Dated merchandise. Sparsely populated stores.
That was the scene in Bed Bath & Beyond Inc. locations across the US as the once-mighty home goods chain blazes toward bankruptcy in what could be the largest US retail collapse since Toys “R” Us.
The Union, New Jersey-based retailer has warned it doesn’t have the funds to pay its lenders, and stalled efforts to find a bidder could put the retailer on a path toward liquidation, Bloomberg News reported on Friday.
It’s a far cry from Bed Bath & Beyond’s category-killer heyday, when the retailer’s ubiquitous 20%-off coupons and cavernous stores made it a staple of back-to-school shopping lists and wedding registries across America.
“There’s not as much stuff here,” said 77-year-old Angela Caponi, who was recently browsing the aisles at a Hamilton, New Jersey store. “It’s just not the same.”
Weeks after Christmas clearance items were gone from other retailers, the central New Jersey store was still hawking lighted tree toppers and matching red flannel pajamas for children and dogs. Some customers said they couldn’t find basic items like sheets, but $209 Sharper Image massage tools and $649.99 Dyson vacuums were aplenty.
“I came in for bed linens and instead look what I got: I bought dish towels,” said Mary Brienza, a 47-year-old nurse from New Jersey.
Read More: Bed Bath & Beyond Falters in Effort to Find Buyer in Bankruptcy
Target’s Gain
About 1,500 miles away near Dallas, employees and customers worried about the chain’s future after the company said it would shutter another 87 stores in addition to the 150 closures it announced in August.
If Bed Bath & Beyond were to close, “what would we be left with? Target and Walmart?” said shopper Marguerite Trail, 71, who lives in Houston but was visiting relatives in the area.
One employee at the Dallas-area store acknowledged the negative headlines about the chain but said merchandise was arriving regularly and emphasized that the store had no plans to close.
With a Bed Bath & Beyond bankruptcy filing growing increasingly imminent, competing retailers like Target Corp. and Walmart Inc. are poised to score a fresh crop of customers if the company is forced to shut its doors entirely.
Target “has benefited from the continued rationalization of the retail landscape from department stores to specialty players such as Toys ‘R’ Us,” Rupesh Parikh, an analyst at Oppenheimer & Co., said in a note to clients last week. “We believe the company could continue to capitalize on ongoing challenges at retail, including at department stores, Bed Bath & Beyond.”
In the case of a full liquidation of Bed Bath & Beyond, Target could grab as much as 20% of the company’s business, adding $1.11 billion in sales and 28 cents a share in earnings, Parikh said.
Shoppers Scarce
Only a handful of late-morning shoppers trickled into the store near Dallas on Friday morning. Among them were Peter and Katherine Grimshaw, a couple in their 70s, who were stocking up on towels and other bath products after recently moving to a new home.
Katherine, a Bed Bath & Beyond customer for “years and years and years,” criticized what she saw as a less abundant selection of merchandise since the pandemic. But she said she kept coming back because she found it easier to shop there than at larger stores.
A large Target operates near the Dallas-area Bed Bath & Beyond location. HomeGoods, part of a chain owned by TJX Cos., Walmart, Lowe’s Cos. Inc., Ross Stores Inc. and Dollar Tree Inc. all have nearby stores.
“Since the move, we’ve probably come here five or six times,” Peter said of Bed Bath & Beyond. “If they shut it down, we’d have to go to three other stores just to get what we can find here.”
–With assistance from Kevin Simauchi and Cailley LaPara.
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