After fighting for months to avoid it, Bed Bath & Beyond said it will immediately start to wind down its retail operations after filing for Chapter 11 bankruptcy protection Sunday.

The Union, New Jersey-based chain, which described itself as the largest home goods retailer in the United States in court documents, said its 360 Bed Bath & Beyond and 120 Buy Buy Baby stores will remain open for now "as the company begins its efforts to effectuate the closure of its retail locations."

Bed Bath & Beyond — known for its 20% off coupons and once a go-to for shoppers looking for items such as linens, kitchen appliances and bedding — as expected filed voluntary petitions for relief under Chapter 11 in the U.S. Bankruptcy Court for the District of New Jersey. In a statement, the retailer said it will kick off "an orderly wind-down of its businesses and liquidation sales while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets." The company said it had already closed over 430 stores before seeking Chapter 11.

Bed Bath & Beyond, which at its peak had nearly 1,000 stores, said it has received a commitment of roughly $240 million in debtor-in-possession financing from Sixth Street Specialty Lending. Following court approval, the retailer said it expects that financing to provide the liquidity needed to support its operations during the Chapter 11 process. The company, which has $4.4 billion in assets and $5.2 billion in debt, said not to think it's down-for-the-count yet as it could find a buyer for some assets and then pivot and stop some store closures.

"Bed Bath & Beyond has pulled off long-shot transactions several times in the last six months, so nobody should think Bed Bath & Beyond will not be able to do so again," Holly Etlin, Bed Bath & Beyond's chief financial officer and chief restructuring officer, said in a court document. "To the contrary, Bed Bath & Beyond and its professionals will make every effort to salvage all or a portion of operations for the benefit of all stakeholders."

The company is the latest retailer to file for Chapter 11 this year, following in the path of companies such as Conshocken, Pennsylvania-based David's Bridal, Woodcliff Lake, New Jersey-based Party City and Dallas-based Tuesday Morning. But unlike the others, Bed Bath & Beyond's travails have been making headlines for several years, with its financial woes exacerbated in recent months during what now appears to be the failure of its final turnaround effort.

Overall, one of the criticisms that Bed Bath & Beyond has faced, from retail analysts and officials brought in to rescue it, was that it didn't pivot to quickly change with the times in the face of new and lower-cost competitors such as Amazon, Walmart, Target, T.J. Maxx and HomeGoods. The company, whose first two stores debuted n 1971, was slow to ramp up its online platform, for example.

"Bed Bath and Beyond has finally succumbed to the fact its business is broken and filed for bankruptcy," Neil Saunders, managing director of GlobalData, said Sunday in a note to clients. "While it has been a long time coming, this has been the inevitable destination since early last year when trading deteriorated sharply, and the company fell deeply into the red. While management refused to go down without a fight, and explored every option to avoid bankruptcy, they simply could not defy gravity forever."

Saunders cited what he described as Bed Bath & Beyond's "single point of failure" is that it stopped being relevant to consumers.

"Arguably, this goes back a long way thanks to the rise of online and the improvement of home offers at rivals like Target," he said. "Against this increased competition, Bed Bath and Beyond’s approach to retail — which lacked inspiration — was found wanting."

It's been a rocky road for the retailer. In 2019, Bed Bath & Beyond's then-management team was ousted in a proxy fight when activist investors decried the company's flagging sales and stock price. Former Target executive Mark Tritton was brought on board later that year, but his game plan of bringing a host of private brands to Bed Bath & Beyond, with less focus on national brands, was a huge flop, a "botched turnaround," according to Saunders.

"His plans, which were essentially a carbon copy of what he had done at his former employer, Target, quickly alienated existing customers and failed to attract new ones," Saunders said. "While many ideas, such as the introduction of private labels and scaling back discount coupons, seemed sensible on paper, they were poorly executed and out of alignment with what shoppers wanted. Tumbling sales resulted, exacerbated by a tightening economy."

Etlin described Tritton's strategy as causing "self-inflicted disruption."

Supply-chain snafus left Bed Bath & Beyond bereft of inventory during the 2021 holiday season, missing out on $175 million in sales because of a lack of stock of popular items. In a tragic turn, the company's chief financial officer committed suicide in September last year. And Bed Bath & Beyond has been burning through cash, twice warning that it might have to go to bankruptcy court for relief, as it jockeyed to raise financing to hang on.

In response to Saunders' comments, Bed Bath & Beyond cited President and CEO Sue Gove's statement in the news release about the bankruptcy filing.

"Millions of customers have trusted us through the most important milestones in their lives — from going to college to getting married, settling into a new home to having a baby," Gove said. "Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and Buy Buy Baby. We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process. We will continue working diligently to maximize value for the benefit of all stakeholders."

Gove replaced Tritton in June last year.

Etlin acknowledged Bed Bath & Beyond's failings in the court document.

"Over the past decade, multiple large brand store-front retailers have experienced distress attributed to the loss of crucial in-store foot traffic, declining in-store sales, the growth of e-commerce giants, and a younger generation of customers who are more inclined to order items on the internet with expedited shipping options that allow for same-day delivery of items," she said. "Bed Bath & Beyond was another major retailer that succumbed to these pressures by failing to expeditiously adapt to changing consumer shopping behavior."

Etlin said the retailer's sales fell almost $1 billion year over year in the fourth quarter, "and strained vendor credit relationships, which led to a lack of inventory."

According to Etkin, "And notwithstanding painstaking, creative, and exhaustive efforts to right the ship along the way, Bed Bath & Beyond is simply unable to service its funded debt obligations while simultaneously supplying sufficient inventory to its store locations."

In court filings, Bed Bath & Beyond said it "will immediately commence an orderly and value-maximizing wind-down of their business, while marketing a sale of all or part of their business on a timeline consented to" by its lenders.

But even after starting its liquidation sales, Bed Bath & Beyond plans to use its bankruptcy proceedings to conduct a limited sale and marketing process for some or all of its assets. It said it has asked the court for the authority to market Bed Bath & Beyond and Buy Buy Baby as part of an auction.

"The outcome of the bankruptcy process is unclear," Saunders said. "Unless a buyer for the brand or assets comes forward, by rights Bed Bath and Beyond should be liquidated as it is too deeply in the red and is in no fit state to salvage. It could emerge as an online-only operator but, in our view, this would mean reduced visibility and a much more difficult trading model from a profit perspective. Ultimately, if it emerges from bankruptcy at all, Bed Bath & Beyond will be a shadow of its former self. The Buy Buy Baby Baby business is the one part of the operation that will probably attract interest from buyers."

Bed Bath & Beyond said it is "also strategically managing inventory to preserve value," adding that "in the event of a successful sale, the company will pivot away from any store closings needed to implement a transaction."

Even before its most recent dire financial situation, Bed Bath & Beyond has been downsizing its brick-and-mortar. It dramatically stepped up that effort as it tried to stem its cash burn, shutting down its entire beauty-goods chain Harmon in January. The company then announced several rounds of store closings for its banner chain, most recently announcing a further major slashing of its store count in February. And it has shuttered its Canadian stores.

Bed Bath & Beyond also made a series of moves to arrange financing and get the company a lifeline, to little avail. Earlier this month it said it had arranged a $120 million deal to secure more inventory. That came after Bed Bath & Beyond terminated a deal it had to raise just over $1 billion and said it instead would initiate a $300 million stock offering.

"The failure of Bed Bath and Beyond is good news for rivals that will be able to pick up market share," Saunders said. "From our analysis the likely winners are Target, HomeGoods, some T.J. Maxx stores, Walmart and Amazon. The remaining share Bed Bath and Beyond has will be spread quite thinly. As for properties, because Bed Bath & Beyond is in some reasonable locations, we believe landlords have already lined up potential new tenants for the spaces."

Real estate brokers have said that Bed Bath & Beyond has attractive store sites, although they may be a bit large for retailers today.

Frank Meyrath, vice president of acquisitions and dispositions for Atlanta-based RCG Ventures, a real estate investment group, offered his take on Bed Bath & Beyond's Chapter 11 filing on LinkedIn.

"Personally I stopped in my BB&B to buy a pillow and couldn't find anything," he said. "Went next door to Target and bought two. Although this will come with significant back-fill costs for landlords, ultimately this is an opportunity to reposition underutilized space and drive more property traffic."

In its filing, Bed Bath & Beyond said it currently employs about 14,000 nonseasonal employees, but it has already notified labor officials in New Jersey that it plans to lay off nearly 1,300 workers in that state.

Bed Bath & Beyond offered its own analysis of its turnaround strategy in its statement.

"For decades, Bed Bath & Beyond set the standard across the home goods sector and held its position through many different economic cycles and alongside a continuously evolving customer," the retailer said. "In late 2022, the company initiated a significant turnaround plan to reset foundational elements of its operational and financial positioning to better serve customers, employees, and supplier partners. Actions have been underway to improve merchandise assortment, streamline supply chain, and optimize its store footprint."

But it wasn't enough, according to Saunders.

"Ultimately, today’s bankruptcy underlines the fact that even giants of retail can fail if they stop focusing on and understanding the customer," he said.

Kirkland & Ellis and Cole Schotz are serving as legal counsel, Lazard Frères & Co. as investment banker and AlixPartners as financial adviser. The company has retained Hilco Merchant Resources to assist with inventory sales.