Bed Bath & Beyond
In October 2020, Hilco Consumer-Retail (HCR) was engaged by Bed Bath & Beyond to address operational challenges exacerbated by the COVID-19 pandemic. The initial focus was on rationalizing the store fleet and monetizing aged and excess inventory. Over the next three years, certain divisions of HCR, including Hilco Merchant Resources (HMR), Hilco Wholesale Solutions (HWS), and ReStore Capital, executed a series of strategic initiatives that ultimately culminated in a value-maximizing liquidation of Bed Bath & Beyond’s assets during its Chapter 11 bankruptcy in 2023.
- HCR managed the wind-down of US and Canadian brick-and-mortar operations across 37 phases
- HMR oversaw the closure and liquidation of 1,160 stores, monetizing $1.98 billion of inventory and FF&E
- HWS sourced additional inventory, which was sold during the closures, enhancing assortments and maximizing recovery
- ReStore Capital provided $120 million of funding to procure inventory, improving product availability and recovery
HCR’s engagement began with HMR managing the closure of 68 underperforming Bed Bath & Beyond stores. This process included the liquidation of inventory and fixtures, furnishings, and equipment (FF&E). HMR’s success led to an expanded role, eventually overseeing the closure of more than double the initial number of stores. Throughout eight phases, HMR managed strategic shutdowns across both Bed Bath & Beyond and buybuy BABY brands. By achieving a 100% sell-through on over $230 million of inventory, HMR not only maximized recovery values but also allowed Bed Bath & Beyond’s internal teams to concentrate on other critical initiatives.
In April 2023, ReStore Capital launched a $120 million vendor consignment program to help address the operational and financial challenges Bed Bath & Beyond was facing during a critical period. Bed Bath & Beyond had recently shifted its merchandising strategy to focus more on private-label brands, which generally offer higher margins. However, this move reduced the availability of the national branded products that customers had long associated with Bed Bath & Beyond, leading to a significant decline in sales.
As Bed Bath & Beyond sought to reintroduce these branded products, vendors—concerned about the company’s financial distress—demanded cash on delivery (COD) terms, which Bed Bath & Beyond could not meet due to liquidity constraints. To solve this, ReStore Capital provided a $120 million consignment facility, which allowed vendors to be paid upfront.
With this structure in place, Bed Bath & Beyond used the $120 million to pay vendors for inventory, which was ordered, shipped, and sold through the stores. As inventory sold, proceeds were used to repay ReStore Capital. This arrangement ensured that Bed Bath & Beyond could maintain product availability and meet customer demand to maximize recovery.
In late April 2023, Bed Bath & Beyond filed for Chapter 11 bankruptcy, prompting a comprehensive nationwide store closing event. Managed by HCR and its JV partners, this effort encompassed 360 Bed Bath & Beyond stores and 120 buybuy BABY locations. A key driver of the liquidation’s success was the role played by HWS, which sourced additional inventory to be sold in the closing stores. By expanding product assortments, HWS helped drive more foot traffic and higher sales, ultimately boosting the overall recovery for the estate. Hilco’s seamless execution ensured that all assets, including FF&E, were monetized to their fullest potential while overseeing the wind-down of operations.
From the initial engagement in October 2020 to the final nationwide store liquidation in April 2023, HCR demonstrated exceptional expertise in addressing Bed Bath & Beyond’s operational and financial challenges. HMR’s strategic execution of store closures and inventory monetization maximized recovery values, while ReStore Capital’s innovative vendor consignment program and HWS’s targeted inventory sourcing bolstered store performance during critical periods.
