(NEXSTAR) – Bed Bath & Beyond told Nexstar Monday that it will be closing 87 additional stores, an announcement that comes days after the beleaguered home goods chain said it had defaulted on its loans.
The company also plans to close five buybuy BABY stores as well as all of its Harmon beauty locations.
Bed Bath & Beyond said the closures are being done to increase efficiency as the company works with advisors to “consider multiple paths” as the retailer tries to turn the business around.
“This store fleet reduction expands the Company’s ongoing closure program of approximately 150 lower-producing Bed Bath & Beyond banner stores. We will update all stakeholders on our plans as they develop and finalize,” a spokesperson told Nexstar.
Impacted store locations were not immediately available Monday.
Last Thursday, Bed Bath & Beyond said in a Securities and Exchange Commission filing that it had defaulted on its loans, which may force it to consider restructuring its debt in bankruptcy court.
The filing included some of the other strategies Bed Bath & Beyond is employing to improve its financial position, such as lowering costs, trimming capital expenditures, trying to rework rental deals with landlords and reducing the footprint of its stores, as well as the caveat that “these measures may not be successful.”
Bed Bath & Beyond warned on Jan. 5 that it was considering options including filing for bankruptcy, saying that there was “substantial doubt” that it could stay in business. A week later, it reported a 33% drop in sales and a widening loss for its fiscal third quarter that ended Nov. 26, compared with the year-ago period. Sales at stores opened at least a year, a key indicator of a company’s health, dropped 32%.
Its recently appointed president and CEO, Sue Gove, blamed the poor holiday performance on inventory constraints and reduced credit limits that resulted in shortages of merchandise on store shelves.
Typically, struggling retailers file for bankruptcy protection after the holiday shopping season because they have a cash cushion coming from the two-month sales period.
Still, turning around Bed Bath & Beyond is expected to be difficult amid increasing competition from discounters. Its struggles come as the economy is weakening, and shoppers are tightening their purse strings.
The Associated Press contributed to this report.