(Bloomberg)—Bed Bath & Beyond Inc. (No. 59 in the 2020 Digital Commerce 360 Top 1000) will eliminate 2,800 jobs under a plan to cut costs and streamline operations amid deepening challenges for bricks-and-mortar retailers.
The “significant workforce reduction” will begin immediately, affecting both corporate headquarters and retail stores, the home goods retailer said Tuesday in a statement. Along with previously announced restructuring actions, the latest effort will result in as much as $150 million in annual pretax cost savings, the company said.
The job cuts follow plans by Bed Bath & Beyond to close 200 stores and sell assets as it navigates a coronavirus pandemic that has upended the retail sector. Like many peers, Bed Bath & Beyond has tried to scale down, build up its e-commerce business, negotiate with landlords and shore up liquidity where it can. In some cases Bed Bath & Beyond deferred rent payments for stores that went dark due to pandemic shutdowns.
The chain had 55,000 workers as of February, suggesting the cuts account for about 5% of the workforce.
J. Crew wins bankruptcy exit approval
U.S. Bankruptcy Judge Keith Phillips confirmed the plan in a virtual hearing, overruling objections from some landlords and the U.S. government’s bankruptcy watchdog. Phillips said J. Crew’s plan conforms to federal bankruptcy rules and thanked the company’s stakeholders for coming to a “largely consensual” deal — most of the retailer’s creditors support the plan.
The retailer expects to officially exit bankruptcy in September, according to a statement. To do so, it’ll swap more than $1.6 billion of old secured debt for ownership in the company. The plan also provides for a new $400 million credit facility and will turn J. Crew’s bankruptcy loan into $400 million of term loans.
J. Crew’s new owners will include Anchorage Capital Group LLC, Davidson Kempner Capital Management LLC and GSO Capital Partners LP, according to court papers 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 problems pre-date COVID-19. The bankruptcy plan will wipe out equity stakes of TPG Capital LP and Leonard Green & Partners LP, which bought J. Crew in a 2011 leveraged buyout.
The company operates 170 J. Crew stores—down from 181 at the start of the case—along 141 Madewell stores. Before furloughing most of its employees in April, the company employed about 13,000 around the world. The “vast majority” of its store associates had returned to work as of Aug. 9.