Bed Bath & Beyond Launches Program to Improve Merchandise Availability

Bed Bath & Beyond has collaborated with ReStore Capital to launch a vendor consignment program.

With this program, credit-focused investment manager ReStore Capital will purchase up to $120 million in merchandise from the retailer’s key suppliers, on a revolving basis, to increase the availability of merchandise at Bed Bath & Beyond and buybuy Baby, the retailer said in a Wednesday (April 5) press release.

“Our new vendor consignment program enables us to increase our inventory position in top items that customers are buying and improve the customer experience,” Bed Bath & Beyond President and CEO Sue Gove said in the release. “This capital-light solution can allow us to strengthen merchandise availability and better fulfill demand.”

This announcement comes more than two months after the retailer reiterated its Jan. 5 bankruptcy warning after a loan default.

The firm said in a Jan. 26 filing with the Securities and Exchange Commission (SEC) that it had defaulted on a loan, has doubts about its resilience as an ongoing concern and was considering all strategic alternatives.

Bed Bath & Beyond said in the filing that its financial situation was worsened by it having lower-than-expected inventory to sell during the holiday season because of accelerated vendor terms and credit line constraints.

About two weeks earlier, on Jan. 10, Gove said on a call with investors that the retailer was facing the challenges of getting vendors to keep providing inventory under increasingly bad terms, struggling to give loyal customers a reason to come back to its understocked stores and working with advisers on turnaround plans.

The new vendor consignment program is part of Bed Bath & Beyond’s plans to overcome near-term operational and financial challenges, according to the press release.

Along with boosting the availability of merchandise, the program will further support the retailer’s partnerships with its suppliers.

“We know the performance and value of our business today is not representative of our full potential,” Gove said in the release. “Our entire organization is focused on expanding and accelerating improvement. We are doing what we must to sustain our business immediately and unlock our true value over the long term — for all stakeholders.”