Bed Bath & Beyond’s Canadian operations are going out of business, according to a court filing on Friday, two days after the retailer quickly raised cash to stave off a U.S. bankruptcy.
The Canadian division, which operates 54 Bed Bath & Beyond stores and 11 buybuy BABY stores, is insolvent, the filing posted on the website of consultancy Alvarez & Marsal showed. Alvarez & Marsal has been appointed as a monitor of the business in the Canadian court case.
The Canadian business does not have the “capacity or ability to independently effect a recapitalization or restructuring of the Canadian operations without access to cash and the support” from the parent company and its lenders, according to the filing.
Bed Bath & Beyond Canada Ltd., was granted an initial order for creditor protection by the Ontario Superior Court of Justice Friday under the Companies’ Creditors Arrangement Act, according to Alvarez & Marsal.
Bed Bath & Beyond Canada had a net loss of $99.5 million for the nine-month period ending Nov. 26, 2022, the documents show.
As of Nov. 26, Bed Bath & Beyond Canada’s assets were valued at around $480.1 million, the documents show, while its total liabilities were worth around $429.7 million.
Buybuy BABY Canada to shut 11 stores
Adjusted earnings for the past three financial years were negative, and the Canadian arm of the retail giant contributed significant negative adjusted earnings margins to the parent company, the documents said.
U.S. parent company Bed Bath & Beyond Inc. has shut scores of its stores across the country and warned last month that it may need to file for bankruptcy protection as it was unable to pay back its loans.
It recently raised about $1 billion through offerings of preferred stock and warrants, which it said will be used to pay off debt.
The documents say the parent company has determined it’s no longer able to provide financial and operational support to its Canadian arm.
Buybuy BABY Canada had assets worth $52.7 million US and liabilities of about $86.9 million US.