2 Bed Bath & Beyond stores, 6 Harmon locations closing on Long Island

Teetering on the brink of bankruptcy, Bed Bath & Beyond is shrinking yet again.

The home goods retailer's parent company will close 87 more Bed Bath & Beyond stores, including two on Long Island — in New Hyde Park and Bohemia — as well as five buybuy Baby stores, which sell children’s clothes, furniture and other merchandise.

Also, Bed Bath & Beyond Inc. will close all 49 of its Harmon health and beauty stores, including the six Harmon Face Values stores on Long Island — in Carle Place, Commack, Massapequa, Melville, Mineola and Plainview.

“As we continue to work with our advisors to consider multiple paths, we are implementing actions to manage our business as efficiently as possible. … This store fleet reduction expands the company’s ongoing closure program of approximately 150 lower-producing Bed Bath & Beyond banner stores,” the company said in a statement Tuesday.

The retailer did not respond to Newsday’s inquiries about when the stores will close or how many workers will be affected, but employees at the New Hyde Park and Bohemia locations said the stores will close in March.

Founded in 1971, Bed Bath & Beyond has been closing hundreds of stores for several years to try to cut its debt.

As of Nov. 26, the company had a total of 949 stores, including 762 Bed Bath & Beyond stores in the United States and Canada, 137 buybuy Baby stores, and 50 stores under the names Harmon, Harmon Face Values or Face Values.

Five years earlier, the company had a total of 1,558 stores, including 1,020 Bed Bath & Beyond stores.

There are eight Bed Bath & Beyond stores and one buybuy Baby store on Long Island currently.

A host of problems

Bed Bath & Beyond is trying to improve its position through various means, including cost cutting, closing stores and seeking rent reductions from retail landlords, it said in a U.S. Securities and Exchange Commission filing Thursday.

The Union, New Jersey-based retailer has been struggling for at least a decade and likely is headed for bankruptcy soon, analysts said.

The company lost $392.9 million in the third fiscal quarter, which ended Nov. 26, and $1.11 billion in the first three quarters of 2022, according to an earnings report released in January.

In the SEC filing last week, Bed Bath & Beyond said it had defaulted on debt payments to JPMorgan Chase, and that it was considering “strategic alternatives,” including restructuring its debt under a bankruptcy. 

The retailer’s issues are myriad, including having too many stores; a lack of product differentiation; growing competition from retailers in the home goods category; and Bed Bath & Beyond’s unsuccessful pivot from name-brand to private-label goods in the past few years, analysts told Newsday.

Consumers who shop at Bed Bath & Beyond want national brands, so the retailer “basically had to clear out all the inventory that people didn’t want and restock the inventory that people did want,” said Jaime Katz, an equity analyst at Morningstar Investment Service in Chicago.

The company also depended on coupons too much to compete on price, she said.

Also, supply chain issues during the COVID-19 pandemic exposed Bed Bath & Beyond’s antiquated distribution infrastructure, said Justin Kleber, senior research analyst in the St. Louis office of Baird, a Milwaukee-based financial services company.

Bankruptcy is inevitable for the retailer, whose revenue peaked in 2017, he said.

“This company is not generating any cash flow.  When you lose your line of credit that is basically funding the business, I don’t see any outcome outside of bankruptcy,” he said.

High inflation has cut into consumers’ spending for home goods in general, which dealt another blow to an already struggling Bed Bath & Beyond, said Declan Gargan, a credit analyst at S&P Global Ratings, a Manhattan-based credit rating agency that downgraded Bed Bath & Beyond’s rating from CC to D last week after it announced the debt default.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.