Bed Bath & Beyond plans to cut 2,800 jobs as part of restructuring plan
(Bloomberg)—Bed Bath & Beyond Inc. (#59 in the 2020 Digital Commerce 360 Top 1000) will cut 2,800 jobs as part of a plan to cut costs and streamline operations amid growing challenges for brick-and-mortar retailers.
The “significant downsizing” will begin immediately, affecting both head office and retail stores, the home goods retailer said in a statement on Tuesday. Along with previously announced restructuring actions, the latest effort will result in up to $150 million in annual pretax savings, the company said.
The job cuts follow Bed Bath & Beyond’s plans to close 200 stores and sell assets as it navigates a coronavirus pandemic that has upended the retail industry. Like many peers, Bed Bath & Beyond has tried to downsize, grow its e-commerce business, negotiate with landlords and bolster cash where it can. In some cases, Bed Bath & Beyond has deferred rent payments for stores that have shut down due to pandemic closures.
The chain had 55,000 workers in February, suggesting the cuts represent around 5% of the workforce.
J. Crew Obtains Bankruptcy Exit Approval
US Bankruptcy Judge Keith Phillips upheld the plan in a virtual hearing, overruling objections from some landlords and the US government’s bankruptcy watchdog. Phillips said J. Crew’s plan complies with federal bankruptcy rules and thanked the company’s stakeholders for reaching a “largely consensual” deal — most of the retailer’s creditors support the plan.
The retailer expects to officially emerge from bankruptcy in September, according to a statement. It will do so by swapping more than $1.6 billion in old secured debt for ownership of the business. The plan also includes a new $400 million credit facility and will turn J. Crew’s bankruptcy loan into $400 million in term loans.
The new owners of J. Crew will include Anchorage Capital Group LLC, Davidson Kempner Capital Management LLC and GSO Capital Partners LP, according to court documents detailing debt holdings as of June 24.
The purveyor of preppy fashion filed for bankruptcy in Virginia in early May, the first major retailer to do so during pandemic-related shutdowns, though its issues predate COVID-19. The bankruptcy plan will eliminate stakes in TPG Capital LP and Leonard Green & Partners LP, which bought J. Crew in a leveraged buyout in 2011.
The company operates 170 J. Crew stores—against 181 at the start of the affair—along 141 Madewell stores. Before laying off most of its employees in April, the company employed around 13,000 people worldwide. The “vast majority” of its in-store associates had returned to work on August 9.