Bankruptcy Case: BED BATH & BEYOND INC.

BED BATH & BEYOND INC. is a home goods retailer that sells home textiles, housewares, and home accessories. BED BAT & BEYOND INC. filed for Chapter 11 bankruptcy on April 23, 2023.

Our BRAINKRUPTCY risk measure has consistently indicated that BED BATH & BEYOND INC. was already financially distressed and at the verge of bankruptcy since January 2022. From that point in time until the bankruptcy filing date, the stock of BED BATH & BEYOND INC. has lost almost its complete value.

The relationship between the measure of bankruptcy risk and the stock performance is even more striking when the financial loss is tracked for recent months. There was a pronounced relationship between high and increasing bankruptcy risk and the financial loss that resulted from the declining stock price. A high and increasing measure of bankruptcy risk was strongly associated with a decreasing stock price.

The comparison between BED BATH & BEYOND INC. and the companies in the same industry (SIC 57: Home Furniture, Furnishings, and Equipment Stores) also indicates severe financial distress in the months leading up to the bankruptcy filing date. A lower SIC 2 industry rank shows that a company is suffering greater financial distress than other companies within the same industry; thus, the company with an industry rank of 1 is exposed to extremely high financial distress. BED BATH & BEYOND INC. had the highest SIC 2 industry rank since January 2022. As a result, the bankruptcy of BED BATH & BEYOND INC. was a matter of time.

• The BRAINKRUPTCY risk measure helps identify financially distressed companies and upcoming bankruptcies at an early stage.

• The BRAINKRUPTCY risk measure helps prevent large financial losses in these financially distressed companies.

• The interaction between the bankruptcy risk of an individual company and the relative view of the company within its industry creates detailed and valuable insights.