Bed Bath & Beyond enters into $120M merchandise agreement in bid to stave off bankruptcy

Beleaguered retailer Bed Bath & Beyond announced Wednesday it’s partnering with Hilco Global on a $120 million arrangement to keep merchandise on the shelves and avoid filing for bankruptcy.

Bed Bath & Beyond entered into a vendor consignment program with ReStore Capital, an investment management firm that’s a subsidiary of Hilco Global and provides "creative financing solutions in the consumer, retail, commercial, wholesale and manufacturing industries."

Under the new deal, ReStore Capital will buy up to $120 million in merchandise from key suppliers to augment the retailer’s inventory of products sold at Bed Bath & Beyond and BuyBuy BABY.

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"We remain relentless in executing plans that can help us overcome near-term operational and financial challenges," Bed Bath & Beyond President and CEO Sue Gove said in a statement. "Our new vendor consignment program enables us to increase our inventory position in top items that customers are buying and improve the customer experience. This capital-light solution can allow us to strengthen merchandise availability and better fulfill demand.

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"The support we are seeing from our top supplier partners demonstrates the staying power of our brands and our potential for sustainable improvement," Gove added. "We know the performance and value of our business today is not representative of our full potential."

The company has teetered on the brink of bankruptcy this year following a series of poor financial quarters that have strained its cash flow. 

That has prompted Bed Bath & Beyond to issue stock offerings of $360 million in February and $300 million in March that further diluted its already battered stock, which is trading around 34 cents per share.

The new merchandise consignment arrangement is part of an effort to stabilize the retailer’s inventory. Bed Bath & Beyond has previously noted struggles to keep inventory in stores as vendors have tightened the terms on which the company can purchase those items, such as requiring prepayments before order fulfillment. 

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Amid its financial struggles, Bed Bath & Beyond closed 150 stores last year and is planning to shutter an additional 87 stores, plus five BuyBuy Baby stores, this year. The company is also closing its health and beauty discount chain, Harmon.

FOX Business’ Daniella Genovese contributed to this article.