After over a year of struggle to stay in business, Bed Bath & Beyond has filed for bankruptcy. No one will save it by buying its assets. Its inventory will be liquidated, which means that soon, nothing will be left–no stores or people. Tens of thousands of its workers have lost jobs in the last year. One of America’s better-known retailers could not stay viable. It joined a group that includes JCPenny, Kmart, and Sears.
Bed Bath’s demise was caused primarily by two things. The first was poor management, a common cause of failed businesses. The other was much larger competition that sold similar items.
Management made poor decisions about Bed Bath’s store locations and what products it would sell. The executive suite became a revolving door. Each new team had a larger set of problems than its predecessors.
Like many American retailers, it did not have a large online presence, or at least one able to compete with Amazon.com, which replicated almost the entire Bed Bath inventory. There was no remedy for this. Amazon is just too big. And the Covid-19 pandemic made the trouble worse. People could not go to retailer locations, so they moved online. This challenge lasted for months as the virus spread and more people died.
Bed Bath had to shrink and shrink over and over again to preserve cash. A smaller footprint made it more difficult for consumers to find its locations. At some point, many consumers no longer tried.
Finally, cash became its problem. Bed Bath could not get inventory delivered because suppliers were owed money. They could see Bed Bath would close and would not take the risk they might never be paid at all. This inventory crunch hit hardest in the final months of last year. That holiday period is critical to the success of most retailers.
Bed Bath tried to get loans and then sell stock. Each attempt fell through. No one wanted to throw good money after bad.
Also see: the companies planning the biggest mass layoffs this year.
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