A Chapter 11 bankruptcy filing casts doubt on the future of this crucial retailer.
Chapter 11 bankruptcy protection provides much-needed flexibility for companies to restructure their operations and finances, giving them a shot at survival. However, there’s no guarantee that any company that enters bankruptcy will emerge from it or if they do, it will be business as usual.Bed Bath & Beyond hoped Chapter 11 bankruptcy would give it time to find a solution, allowing it to remain in business, only to have those efforts fall short.
Store closing sale announcement at a Bed Bath & Beyond indoor mall in northern Idaho. UCG/Getty ImagesIf a company hopes to survive a bankruptcy restructuring, it must eliminate as many expenses as possible. Often, this means closing or selling unprofitable stores to shed labor costs and reduce rent expenses.
It will also need to cut costs, including closing stores. The company has likely done much of the analysis Davidoff suggests, given it recently announced in court filings plans to sell some of its stores and close others.with at least ten years remaining on leases. It also disclosed plans to close about 7% of its 2,200 stores across many states.
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