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  • INDUSTRY NEWS

    • On January 27, 2023, it was reported, Bed Bath & Beyond doesn't have enough cash to pay down its debts. In a filing on Thursday with the Securities & Exchange Commission, the embattled retailer warned for the second time in less than a month that it is considering filing for bankruptcy. The filing came days after the company received a delisting warning from Nasdaq. "At this time, the company does not have sufficient resources to repay the amounts under the Credit Facilities and this will lead the company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code," Bed Bath & Beyond stated in the filing. As of March, Bed Bath & Beyond had about $3 billion in debt. According to a report by The Wall Street Journal, banks have determined Bed Bath & Beyond has defaulted on its credit lines and it doesn't have the funds to repay them. Bed Bath & Beyond warned earlier this month, in two financial filings, including one with the SEC, that it was running out of cash and considering bankruptcy, noting there is "substantial doubt about the company's ability to continue as a going concern." In its most recent filing, the company said it is taking a number of actions to improve its financial position, including, but not limited to, cost cutting, lowering capital expenditures, and reducing its store footprint and related distribution centers. In addition, Bed Bath & Beyond said it will continue to seek reductions in rental obligations with landlords in its determination of the appropriate footprint, seek additional debt or equity capital, reduce or delay the company's business activities and strategic initiatives or sell assets. It warned "these measures may not be successful." As of November 26, 2022, On January 19, 2023, it was reported, Bed Bath & Beyond is said to be moving on many fronts to keep itself going. According to CNBC, Bed Bath & Beyond is considering selling off its core chain as well as the Buybuy Baby business. Potential acquirers include Sycamore Partners and Authentic Brands. Sycamore, which acquired the Belk department store company in 2015, made an unsuccessful play for JCPenney when the company was on the block in 2020. The private equity firm is primarily interested in Bed Bath's Buybuy Baby chain, according to the New York Times. Authentic Brands Group, which is led by Leonard Green & Partners, has scooped up the intellectual property of a number of struggling retail brands, including Brooks Brothers, Barneys and Forever 21. Bed Bath & Beyond is also working to secure additional financing of at least $100 million ahead of a bankruptcy filing, CBNC was told. Two weeks ago, the company announced it had "substantial doubt" about its ability to continue operations. The company said it was exploring a number of strategic alternatives, including bankruptcy, restructuring or refinancing its debt and selling assets. The company is on track to shutter the remaining units among the group of 150 stores it began closing last year. At the end of its third quarter in late November 2022, the company was operating 762 Bed Bath & Beyond stores, 137 Buybuy Baby stores and 50 stores under the names Harmon, Harmon Face Values or Face Values.
    • On January 24, 2023, it was reported, Dollar Tree named Rick Dreiling CEO, effective Jan. 29. The former Dollar General chief will continue to serve as executive chairman. He replaces Mike Witynski, who has been with the company since 2010 and CEO since 2020. Witynski, who led the company during the height of the pandemic, and also oversaw the expansion of Dollar Tree's pricing to $1.25 for most items, is stepping down from the board and leaving the company. The company's C-suite saw significant changes in 2022, with a handful of key executives leaving their positions.
    • On January 24, 2023, it was reported, Serta Simmons Bedding and 13 of its U.S. affiliates filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas Monday. The company announced the filing at 11:08 p.m. Eastern time Monday evening saying the filing was "voluntary" and "pre-arranged." SSB has entered into a restructuring support agreement with "key financial stakeholders" to reduce the company's debt and all the company to "continue making critical investment in its business and brands." In the filing, the company lists its liabilities at between $1 billion and $10 billion, and its assets as between $1 billion and $10 billion. Owned by Advent International, includes two of the mattress segments most iconic brands. In addition to Serta and Simmons, online brand Tuft & Needle, acquired in 2018, is also part of the company's portfolio. According to the company, the restructuring agreement will reduce the company's funded debt from about $1.9 billion to about $300 million and allow SSB to continue investing in its business. The company has received a commitment for a $125 million exit asset-based lending (ABL) credit line available upon SSB's emergence from Chapter 11. The company has also obtained a debtor-in-possession financing in the form of a $125 million ABL credit line. If the court approves the new financing, the company said it will use the funds along with about $170 million of cash on hand, and cash generated from ongoing operations to support its business.
    • On January 18, 2023, it was reported, Party City has filed for Chapter 11 bankruptcy protection amid pullback in consumer spending and higher prices due to inflation. Party City Holdco Inc. has reached a pre-negotiated agreement with a bondholder group to support an "expedited restructuring" that would substantially reduce its debt and "optimize its capital structure and liquidity."The company listed assets of $1 billion to $10 billion and liabilities in the same range in its petition. Party City expects the restructuring to be completed in the second quarter. It has secured a commitment for $150 million in debtor-in-possession financing, subject to court approval, which it said would provide ample cash to continue operations. "In the face of pandemic headwinds, a global supply chain crisis, and other macroeconomic challenges that have faced our industry, we have made significant strides in PCHI's ongoing transformation establishing a solid foundation for long-term growth and continued success as the market leader in the celebrations space," stated CEO Brad Weston. "Today's action to strengthen PCHI's balance sheet will bolster our ability to further advance our strategic priorities and continue to innovate and elevate the customer experience." The company said its more 800 Party City stores and e-commerce site remain open for the business during the proceedings. (Party City Holdco's subsidiaries outside of the U.S., its Party City franchise stores, and its Anagram foil balloon business are not part of the Chapter 11 proceedings and will continue as core components of the PCHI enterprise.) Party City's filing comes as it has been struggling with soft sales and rising prices, as well as tight supplies of helium that cut into its