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1,400 Jobs Wiped Out in Bed Bath & Beyond’s Canada Bankruptcy

While Bed Bath & Beyond has dodged bankruptcy in the United Statesat least for the time being—the retailer has filed for insolvency in Canada. According to a Feb. 10 filing in Ontario Superior Court, the Canadian division isn’t able to continue operating or to restructure without the assistance of its struggling parent company.

The filing—which is the equivalent of bankruptcy under the Companies Creditors Arrangement Act—outlines next steps, including closing 54 Bed Bath & Beyond and 11 BuyBuy Baby stores in Canada. The closures will account for around 1,400 job losses.

“The wind-down process must be commenced as soon as possible to maximize recoveries and limit costs by ensuring that BBB Canada can exit from all retail stores as soon as practicable and avoid further rent, employee costs, critical supplier/service provider fees, bank fees, and other ongoing amounts,” the filing said.

Bed Bath & Beyond’s Canada division hasn’t fared any better than its U.S. counterpart, reporting a net loss of $87.6 million and an EBITDA of negative $81.8 million for the third quarter of fiscal 2022. The company’s total assets are reported to be $427 million with $342 million in total liabilities.

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“The Bed Bath & Beyond Group, including BBB Canada has been in financial difficulty for the past several years, reporting significant net losses since 2018,” according to the filing, which was posted by Alvarez & Marshal, a consultancy firm that is working with Bed Bath & Beyond.

According to the filing, Bed Bath & Beyond Canada recently tapped investment bank Lazard & Frères to find a buyer or other financing solution, but was unable to secure a buyer. Liquidation of the company’s assets is predicted to bring in around $40.5 million.

Bed Bath & Beyond received a much-needed infusion of cash last week through a Series A Stock fund offering that resulted in hedge fund Hudson Bay Capital Management ponying up $225 million for the shares and $800 million through the issuance of securities requiring the holder to purchase shares of Series A preferred stock in future installments. Though good news for the retailer, Bed Bath & Beyond still admitted in an SEC filing that Chapter 11 bankruptcy could still happen pending the success of Hudson Bay’s stock transactions.

According to Jefferies, Bed Bath & Beyond’s departure from Canada leaves about $300 million in market share up for grabs, and the investment bank believes Wayfair and stand to benefit. In a research note published Tuesday, Jefferies estimates that about 60 percent of the international business for Wayfair, whose brand awareness is higher in Canada than in the U.S., it claims, comes from the north-of-the-border market. As far as is concerned, Jefferies said the e-tailer’s pursuit of “a more disciplined approach to Canada with a dedicated website, tailored product assortment, strengthened relations with Canadian-based vendors for [fulfillment], and sharper pricing” could eventually inflate sales and pave the way for expansion in other territories.

Additional reporting by Jessica Binns.