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Bed Bath & Beyond’s Billion-Dollar Default Is Failing Chain’s Latest Bad News

The woes continue for Bed Bath & Beyond, as the embattled retailer failed to meet its Feb. 1 deadline to make interest payments on bonds totaling more than $1 billion, a company spokesperson told Bloomberg.

With this latest default—the company also received a default notice from JP Morgan Chase last week—puts Bed Bath & Beyond in a 30-day grace period and adds to speculation the company could go bankrupt this week. The retailer can still make missed payments during that time. However, that prospect seems unlikely, as Bed Bath & Beyond admitted in an SEC filing late last month that it doesn’t have enough cash to pay its debts.

This latest default appears to be yet another nail in the coffin of the once-robust home goods retailer, which has struggled mightily to remain profitable in recent years. In its most recent earnings report, Bed Bath & Beyond posted a 33 percent net sales decline and a 32 percent drop in comp sales for the third quarter of fiscal 2022.

Just days ago, Bed Bath & Beyond announced plans to close another 87 flagship stores, along with its around 50-store Harmon chain and five BuyBuy Baby locations, in addition to the 150 closings announced last year. Reuters reported that the retailer has assembled a liquidation team to handle going out of business sales.

According to a Reuters report, Bed Bath & Beyond advisors met on Monday to discuss ways to avoid bankruptcy, and the retailer also has been in talks with investment firm Sixth Street to provide funding. Attempts to sell off assets have proved fruitless, with the BuyBuy Baby property the most likely candidate for a buyer.

Bed Bath & Beyond has continued to say it is weighing all options, including a Chapter 11 bankruptcy, which would allow the retailer to stay open as it reorganizes. A spokesperson for the company told Bloomberg that, “multiple paths are being explored and we are determining our next steps carefully, and in a timely manner.”