Bed Bath & Beyond is seeking an infusion of capital, and a buyer before possible bankruptcy

bed bath behind It has been in discussions with potential buyers and lenders as it works to keep its business afloat while filing for potential bankruptcy, according to people familiar with the matter.

The people, who were not authorized to discuss the matter publicly, said the retailer is in the midst of a sale hoping to find a buyer who will keep the doors open for both its major chains, its namesake banner and Buybuy Baby.

At the same time, BedPath was also looking for a lender to provide financing that would keep the company afloat if it were to file for bankruptcy protection in the coming weeks, the people said.

A spokeswoman for BidPath said on Wednesday that the company does not comment on specific relationships but is working with strategic advisors to assess all paths to regain market share and boost liquidity.

“Multiple paths are being explored and we are defining our next steps accurately and in a timely manner,” the spokeswoman said, declining to comment further.

A representative of AlixPartners, which was recently reported by CNBC He was appointed as a consultant to the companyHe declined to comment.

Earlier this month Bed Bath Be warned that he may need to file for bankruptcy After its turnaround plans failed to significantly increase sales and repair its balance sheet. company You reported net losses That exceeds $1.12 billion for the first nine months of the fiscal year. Its liquidity has collapsed in recent months, it has taken on a heavy debt load, and it has faced strained relations with its suppliers.

comparable sales down 32% year over year in the most recent fiscal quarter, November is over. 26. Company leaders said the company has had more difficulty keeping shelves stocked as sellers change payment terms or decide not to ship merchandise due to the retailer’s financial challenges.

Last week, CNBC I mentioned that Bed Bath has begun another round of layoffs In an effort to reduce costs further. The company had about 32,000 employees as of February. 26, 2022, according to public filings.

People added that the company is working on a way to see its chains alive. a day ago Bed Bath issues a ‘continuance’ warning, announced in an employee note that it had hired former Macy’s CEO Sean Hamill to lead its namesake retail, store operations and merchandising operations as Senior Vice President of Stores. Prior to his time at Macy’s, Hummell worked at Abercrombie & Fitch, another retailer that has undergone a transformation.

One potential buyer circulating around Bed Bath is the private equity firm Sycamore Partners, according to people familiar with the discussions. Sycamore is particularly interested in Buybuy Baby, the Bed Bath banner for infants and toddlers, which has outperformed the broader company. People said Buybuy Baby is likely to survive in the future.

Still, selling Bed Bath as a whole is still on the table — albeit at a much smaller volume from stores than it currently is, the people said.

Sycamore is known for buying up retailers, such as womenswear chain Talbots, including struggling companies that have sought bankruptcy interest like Ascena’s Ann Taylor. A spokesman for Sycamore Partners declined to comment. Dealbook previously reported Sycamore interest at Buybuy Baby.

People said BedPath has also attracted interest from companies that acquire intellectual property or corporate brands, particularly those in distress. The people said Authentic Brands, which is frequented by many bankruptcy-run sales to retailers like Forever 21, was also looking into Bed Bath. A representative for Authentic Brands declined to comment.

The people said the company and its advisors were looking to obtain additional funding for a bankruptcy declaration, which could happen in the coming weeks, should a sale not happen. One person said that the company’s advisors are looking for a loan of at least $100 million.

Last year, Bed Bath received $375 million in new financing from lender Sixth Street Partners, which has provided financing to other retailers like JC Penney and Designer Brands.

People said the Sixth Street facility could be turned into bankruptcy financing, or a lender or other could convert their debts into equity and become the owner of Bed Bath. A representative for Sixth Street declined to comment.

Bed Bath’s financing strategy comes as a fellow retailer Party City Search Chapter 11 Protection this week. Also with a heavy debt load, Party City is looking to restructure its balance sheet and move forward with a smaller footprint.

Bankruptcy attorney Eric Snyder of law firm Wilke Auslander said the sale was unrealistic to Bed Bath because of low sales and inventory as well as its extended losses.

“They don’t have the facility to right the ship, and they don’t have the money to keep it going,” Snyder said. “I see no other option than bankruptcy and liquidation.”

—CNBC Melissa Rybko Contribute to this report.