After months of flirting with bankruptcy, Bed Bath & Beyond Inc. BBBY announced on Sunday morning that it has filed for Chapter 11 protection.
The firm had previously indicated in January that it would be declaring bankruptcy shortly, and it used a variety of unconventional strategies to stay afloat since then.
Thus, the market had already largely discounted the news, with shares down 88% year to date before shedding another 32% on Monday.
The firm has indicated that it will keep the remaining 360 Bed Bath & Beyond shops and 120 buybuy BABY locations operational during a scheduled shutdown, provided that it is able to find a buyer for its remaining assets. The competition is in full swing to win over as many of Bed Bath's former clients as possible.
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Wayfair and Overstock Could See Modest Gains, According to BofA
Curtis Nagle, a research analyst at Bank of America Securities, stated in his most recent study that revenue from the Bed Bath & Beyond wind-down will be widely dispersed across the market's top rivals, namely Walmart Inc. WML, Amazon Inc. AMZN, Target Corp. TGT, Wayfair Inc. W, and Williams-Sonoma Inc. WSM. Nagle predicted that Wayfair Inc. and Overstock.com Inc. OSTK would see the strongest relative gains from Bed Bath & Beyond's bankruptcy.
Wayfair revenue would climb 2% for every 5% of Bed Bath & Beyond revenue, while Overstock revenue would increase 3% for every 1% of Bad Bath revenue, according to the analyst.
The analyst does not expect RH RH or Arhaus, Inc. ARHS to see much, if any, potential revenue upside from Bed Bath & Beyond's bankruptcy, given their significantly more wealthy client base and emphasis on furniture, which is not a big market for Bed Bath & Beyond.
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