Bed, Bath and Bye Bye: Company is officially in default

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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by ClownLoach »

storewanderer wrote: January 30th, 2023, 12:24 pm Something else of perhaps key significance:

The Harmon Stores closing are having a liquidation firm handle the closing sales.

Also it is my understanding there is a brief delay in starting the BBB/Baby closures announced last week as they also retained a liquidation firm for that. Some of those liquidation sales have started but not all yet pending the liquidators being placed.

Previous BBB closures they self liquidated.

I am suspicious in this batch of closures they found a liquidation firm to give them cash up front (to continue operations) so they went ahead and let a liquidation firm do this round of closures.

It will be better for a liquidation firm to handle the liquidations. The liquidation firm will manage the liquidations properly. The liquidations they started earlier this month are having issues paying payroll; the one I went into last week which only operates 10-6 daily only had 1 employee/the store manager total working in the store due to payroll cuts that were sent down.
A liquidator at this point means they got cash up front based on the value of the remaining inventory. This probably explains why they didn't file Chapter 11 a few days ago. There can't be that much inventory to sell. They'll probably want to wait and max out as many executive salaries and bonuses as possible until the only money left is whatever is in the store tills.

The latest batch includes some significant stores which are "if you can't make it here, you can't make it anywhere" type locations. One is Hawthorne, CA next door to the highest volume Costco in the state. This store is a two story monster that was just completely renovated top to bottom. A true flagship surrounded by other chains flagship and top 10 volume in company type stores. Great freeway visibility and incredible vehicular traffic. BB&B was so happy with the performance of this store a few years ago that they outbid Staples next door when their lease term was up and installed a Cost Plus World Market there. Seeing this store close is a Gigantic red flag. I suspect they were prioritizing inventory to support the highest volume, most important stores like Hawthorne. Now they find themselves so absolutely desperate for cash that they sold what is undoubtedly their top volume LA market store to a liquidator because it was one of the only stores with anything left to sell. I keep reading articles saying that they think BB&B is "too good of a concept to go away completely" and "they'll probably just close half the stores in bankruptcy reorganization and emerge lean and strong with their best stores.". But they're closing their best stores.....

The others that hit the newest wave closure list are Palm Desert, Upland (yep the one I mentioned that was just celebrating a Grand Reopening with the new concept format), Culver City, Glendora, and Pasadena. These all sound like higher than average volume locations except maybe Upland would be a typical chain average.

One quote about them surely staying in business is in the article below. It was from the CEO of "The Retail Doctor" a consultant. They just lost any remaining credibility they had. (I think this is the same guy that said a few years ago ALDI was wreaking havoc and destroying Ralphs, Albertsons and Stater Bros stores all over SoCal, claiming that they were doing triple the volume of these other chains and we would soon see almost all of those chains put under by the massive volumes ALDI is doing here)

https://www.ocregister.com/2023/01/31/b ... ia-stores/
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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by norcalriteaidclerk »

The full list of 87 supplemental closures:



As long as Sacramento Town and country(the easiest to reach for transit riders)outlasts Roseville and/or elk Grove...

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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by storewanderer »

Still no bankruptcy filing...?

The longer this draws out... the worse this gets...
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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by pseudo3d »

ClownLoach wrote: January 30th, 2023, 10:36 am
pseudo3d wrote: January 30th, 2023, 9:08 am
ClownLoach wrote: January 30th, 2023, 8:25 am Ron Johnson was actually a good visionary; he foresaw the collapse of the American Department Store industry, the end of the traditional mall, as well as the resulting D2C shift by major brands. He screamed about the fact that nobody else in that industry saw the bullets coming, that nobody took the lead on transforming the department store business for the 21st century, and took it upon himself to start the process with JCPenney. Where he went wrong was the fact that he acted like the collapse of the industry was imminent and therefore there was no time to test solutions and educate customers about what needed to change. Instead the changes were rolled out with speed and the customers rebelled. But as I continue to see the same Macy's ad every week for the "One Day Sale" this Friday, Saturday and Sunday (isn't that more than one?) I wonder if things had been different if Ron Johnson had taken over Macy's instead...
I think you're giving Ron Johnson WAY too much credit. He took charge, in what, 2011? The decline of the shopping mall and the department stores wasn't exactly new information at the time, and he couldn't wrap his head around the fact that maybe the solution was just to have attractive, well-merchandised stores with better staffing.

Forcing the stores to convert to EDLP and giving JCPenney one of the worst-looking logo redesigns of the decade wasn't exactly the shot in the arm the chain needed.
I agree that the treatment didn't cure the disease, but if he was in an environment that wasn't in such a hurry for a quick fix like JCPenney was I wonder if the situation would have turned out differently? They were 100% right about the D2C change and embraced it. The pricing model in the department store industry is preposterous and still to this day has not been fixed. When it's day 3 of this week's One Day Only sale and you see that the sale sign has an end date of 01/10/2024 (not a typo, it's real and hundreds of similar end dates) that doesn't work either. The time period in which a department is at the full price because they can't be on sale 365 days a year they could install an electric fence around it and nobody would notice. At least he tried to do something to fix it. Signing brands for D2C was the right thing to do, and what have these D2C brands done with their own real estate? They sell at EDLP until the end of the product life when it goes clearance. It's pretty universally agreed that the failure point was the immediate implementation of the new pricing model without actually testing it or educating the customer on it. I also think that the immediate reduction of advertising to a single monthly catalog was possibly more damaging than the pricing model because it was too easy to miss with a new logo that wasn't familiar and then there was no other avenue to educate the customer about the changes.

Again the JCPenney changes were nothing when compared to the destruction caused by the Tritton BB&B leadership team. The systematic removal of slow turning but high dollar merchandise to be replaced with product Kmart would be embarrassed to sell, while spending billions on unnecessary new programs like 3rd party DCs and remodels that didn't remodel were catastrophic.
The pricing model in department stores is fairly least-concern and easy to screw up. Even Sears switched to a EDLP program in the late 1980s with a big gimmick (closing stores for a few days) but they ended up reversing it within a few years.

Whatever positive changes Johnson did were washed out in the changes that he needed to do but didn't, changes that weren't needed and nobody asked for, and the poor implementation of everything else.

Any comparisons with Tritton aren't going to be entirely equal because Johnson was fired before he could do more damage to the company (Tritton stayed on longer) and the economic situation was better under Johnson (Tritton had to deal with COVID-19). Plus, Sue Gove, his replacement, isn't doing/hasn't doing much at all to reduce the damage of Tritton.
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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by ClownLoach »

pseudo3d wrote: January 31st, 2023, 11:19 pm
ClownLoach wrote: January 30th, 2023, 10:36 am
pseudo3d wrote: January 30th, 2023, 9:08 am
I think you're giving Ron Johnson WAY too much credit. He took charge, in what, 2011? The decline of the shopping mall and the department stores wasn't exactly new information at the time, and he couldn't wrap his head around the fact that maybe the solution was just to have attractive, well-merchandised stores with better staffing.

Forcing the stores to convert to EDLP and giving JCPenney one of the worst-looking logo redesigns of the decade wasn't exactly the shot in the arm the chain needed.
I agree that the treatment didn't cure the disease, but if he was in an environment that wasn't in such a hurry for a quick fix like JCPenney was I wonder if the situation would have turned out differently? They were 100% right about the D2C change and embraced it. The pricing model in the department store industry is preposterous and still to this day has not been fixed. When it's day 3 of this week's One Day Only sale and you see that the sale sign has an end date of 01/10/2024 (not a typo, it's real and hundreds of similar end dates) that doesn't work either. The time period in which a department is at the full price because they can't be on sale 365 days a year they could install an electric fence around it and nobody would notice. At least he tried to do something to fix it. Signing brands for D2C was the right thing to do, and what have these D2C brands done with their own real estate? They sell at EDLP until the end of the product life when it goes clearance. It's pretty universally agreed that the failure point was the immediate implementation of the new pricing model without actually testing it or educating the customer on it. I also think that the immediate reduction of advertising to a single monthly catalog was possibly more damaging than the pricing model because it was too easy to miss with a new logo that wasn't familiar and then there was no other avenue to educate the customer about the changes.

Again the JCPenney changes were nothing when compared to the destruction caused by the Tritton BB&B leadership team. The systematic removal of slow turning but high dollar merchandise to be replaced with product Kmart would be embarrassed to sell, while spending billions on unnecessary new programs like 3rd party DCs and remodels that didn't remodel were catastrophic.
The pricing model in department stores is fairly least-concern and easy to screw up. Even Sears switched to a EDLP program in the late 1980s with a big gimmick (closing stores for a few days) but they ended up reversing it within a few years.

Whatever positive changes Johnson did were washed out in the changes that he needed to do but didn't, changes that weren't needed and nobody asked for, and the poor implementation of everything else.

Any comparisons with Tritton aren't going to be entirely equal because Johnson was fired before he could do more damage to the company (Tritton stayed on longer) and the economic situation was better under Johnson (Tritton had to deal with COVID-19). Plus, Sue Gove, his replacement, isn't doing/hasn't doing much at all to reduce the damage of Tritton.
OK, I'm sorry I even brought it up. I just really think there is no comparison as to how much worse the BB&B fiasco is. When you compare the work needed to clean up JCP it was minimal by comparison (cancel new ads, bring back old print ads, reticket the price tags, run mea culpa ad campaign, bring back some house brands). BB&B was shredded from top to bottom and then the strips reassembled into some sort of expensive purple and denim colored house of zombies. They lost their entire company culture, processes, merchandise, image and identity.
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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by rwsandiego »

Am I the only one who wants BBB to get this over with and file bankruptcy already?
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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by norcalriteaidclerk »

rwsandiego wrote:Am I the only one who wants BBB to get this over with and file bankruptcy already?
Just when we thought it couldn't get any worse...
https://www.marketwatch.com/story/bed-b ... 1675297189




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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by bryceleinan »

At this point, BBBY feels like Kmart, lol. Guessing we’ll see a bankruptcy filing this week, followed by a total liquidation shortly thereafter.
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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by storewanderer »

rwsandiego wrote: February 1st, 2023, 6:00 pm Am I the only one who wants BBB to get this over with and file bankruptcy already?
The sooner they can file, the better it will be as far as them continuing as a going concern...

These delays basically show they can't get a prepackaged Chapter 11 together.

The longer this lasts the more distressed the assets become.

The more distressed the assets become the harder it will be to get a prepackaged Chapter 11 together.

I wonder if they are trying to quickly sell Baby as an entire chain to get another few weeks of money...
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Re: Bed, Bath and Bye Bye: Company is officially in default

Post by ClownLoach »

storewanderer wrote: February 2nd, 2023, 12:18 am
rwsandiego wrote: February 1st, 2023, 6:00 pm Am I the only one who wants BBB to get this over with and file bankruptcy already?
The sooner they can file, the better it will be as far as them continuing as a going concern...

These delays basically show they can't get a prepackaged Chapter 11 together.

The longer this lasts the more distressed the assets become.

The more distressed the assets become the harder it will be to get a prepackaged Chapter 11 together.

I wonder if they are trying to quickly sell Baby as an entire chain to get another few weeks of money...
They took on new debt before Thanksgiving because they were out of money. They had a choice to make then because they surely knew they had one shot at an asset backed loan. They chose to borrow without a prepackaged bankruptcy, probably thinking about the impact filings Pre-holiday made on sales at retailers like Toys R Us and Circuit City. Unfortunately the general public is rather dumb and thinks that if a store files bankruptcy then it is absolutely closing and they should wait to shop until the liquidation begins. In those cases steep double digit negative comps doomed the companies by putting them in default of the necessary Debtor in Possession financing and mandating a sale where of course companies like Hilco/Tiger/Gordon Brothers band together to ensure that the entity goes down the drain. The problem is that they subsequently mismanaged the entire process of doing store closures without help and then weren't able to buy enough product for the go forward locations. So now they are in default of the new asset backed loans and as such aren't going to be able to get another asset backed loan since, well, there aren't any assets it would seem and technically they are all owed to the bank as part of the default. What's going to happen at this rate is the banks are going to sue in bankruptcy court and force the company in, which will surely be the express train right to liquidation as the company will not be in control of the process but the creditors instead.

The newspaper articles use the same boilerplate quotes that they are only closing low volume, unproductive stores. But we know from the locations chosen that is completely untrue. They basically are now leaving the gross majority of their LA market stores which are assuredly their top volumes in the chain. I haven't looked at the Wave 3 list yet but I'm sure it stems from taking an Excel spreadsheet with inventory dollar values, filtering highest to low, then calling Gordon Brothers or whoever else and asking what percentage they'll pay for the inventory in the smallest possible number of stores to get whatever meager sum they needed to make executive $$$ payroll and bonus payments. They are past saving now with a near complete exit of the greater LA area underway. They have lots of terrible, zombie stores in D- grade locations like Murrieta and Santa Ana that get no business at all but as a result were not allocated any of their limited inventory so they're staying open. To their credit their two top volume Orange County locations remain open - both are weird spots in super high income areas (Yorba Linda and Mission Viejo), similar bad location of the store as Murrieta. They must like poorly designed freeway centers where there is visibility until you exit then the center itself is nearly impossible to enter or exit.
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