[New York Diary] The Foretold Bankruptcy: Bed Bath's Abandoned Coupons

Bed Bath & Beyond, the "Company Above Coupons," Files for Bankruptcy
Decades of Generous Coupon Policies Lead to Downfall
Customers Rush to Use Last Coupons as Stores Close Across the U.S.

In the United States, there is a saying that "Bed Bath & Beyond (BBBY) coupons never expire." This line even appeared in an American TV drama at one point. Jennifer Landonhofer, a woman in her 40s living in the Upper West Side of Manhattan, New York, says that in most American households, there is a pile of "coupons you never know when you'll use" from Bed Bath & Beyond tucked away in a drawer. Jennifer herself has used coupons that had expired years ago to receive discounts. Sometimes, she brings several coupons at once to get discounts on different items. This is how Bed Bath & Beyond, a 52-year-old American household goods retail chain known as the "company above coupons," has grown until now.

The company that grew through coupons ultimately collapsed because of coupons. Bed Bath & Beyond, which had been struggling with financial difficulties due to years of poor performance, filed for bankruptcy protection under Chapter 11 on Sunday, the 23rd (local time). The market widely views this as a bankruptcy that was already anticipated. The company had been facing management difficulties due to losses for several years. Literally, the cash flow dried up, and even the company executives had been warning about the possibility of bankruptcy for months. Earlier this year, the company was even notified of default by JPMorgan Chase for failing to pay interest on its debt. According to documents submitted at the time of the bankruptcy filing, Bed Bath & Beyond's debt amounts to $5.2 billion, while its assets total $4.4 billion.

When I visited the Bed Bath & Beyond Lincoln Square store in Manhattan on the 25th, it was already closed. It was the place I visited shortly after arriving in New York about a year ago to buy pillows and winter curtains. On the glass window, there was a notice stating the store was closed along with the phrase "RIP Bed Bath - Lincoln Square." RIP, or Rest in Peace, is commonly used as a phrase to wish the deceased peace or inscribed on tombstones. Over the past year, Bed Bath & Beyond has closed about 400 stores nationwide, and after filing for bankruptcy, the remaining stores have been shutting down one after another. Currently, only the Chelsea store, the largest in Manhattan, remains open and is selling inventory.

When I visited the Chelsea store two days later on the 27th, there were noticeably more customers than usual. Customers kept coming in at a rate of about one every few seconds, and about 20 people were lined up at the checkout counter waiting. Some shelves were already seen to be empty. An employee said, "Since the bankruptcy filing was reported on Sunday, customers have been flocking to use their coupons over the past two days, so it has been especially busy," adding, "Customers are still coming in nonstop."

At the Chelsea store, I met a housewife named Diana Nichols whose shopping cart was filled with several organic towels priced around $16 each, shower curtains, and a set of frying pans. She said the waffle-patterned towels are Bed Bath & Beyond's bestsellers and added, "I've liked Bed Bath & Beyond since I was young," but confessed, "It's really been a long time since I last visited to buy something." Charlotte Kim, an office worker who visited the store on the 24th and again on this day after hearing the bankruptcy news, said, "I came right away on the 24th to use my discount coupons. I hesitated and couldn't buy something then, so I came again. Since the Lincoln Square store near my home closed, I took the subway all the way to Chelsea," adding, "I can't believe Bed Bath & Beyond is closing."

Bed Bath & Beyond opened in 1971. Originally called "Bed & Bath," focusing on linens and bath products, it changed to its current name in 1987. The founders foresaw that specialty stores would be the future of retail, and in 1985, they introduced the concept of a large 20,000-square-foot store as a "category killer." This allowed customers to see and choose from various brands, products, and colors all in one place. Thanks to aggressive coupon policies and other strategies, Bed Bath & Beyond continued to grow, successfully going public in June 1992 and surpassing $1 billion in annual sales by 1999. During the 2000s and 2010s, Bed Bath & Beyond stores were so ingrained in American life that they often appeared as backgrounds in TV dramas.

However, the "generous" coupon policy that fueled Bed Bath & Beyond's growth eventually led to deteriorating business performance. Even as sales increased, net profits declined, falling into what is called the "coupon trap." The company belatedly tried to reduce coupon issuance and improve profitability, but backlash from customers accustomed to coupons was inevitable. To make matters worse, Bed Bath & Beyond lost ground in competition with large category killer stores like Walmart and Target, and failed to keep pace with the rise of e-commerce companies led by Amazon amid changing times. Additionally, the COVID-19 pandemic in 2020 dealt a direct blow to Bed Bath & Beyond's business model, which was centered on offline stores. The company's strategy to launch private label brands also failed due to supply chain disruptions.

Leonard Feinstein, co-founder of Bed Bath & Beyond, revealed the secret to their success in a 1993 interview, 20 years ago, saying, "Having watched department stores collapse, we knew specialty stores would be the next wave in retail." However, what they did not know was what the next wave after that would be.

Now, Bed Bath & Beyond coupons have an expiration date. Since the 26th, the company has stopped accepting coupons. At the Chelsea store I visited on the 27th, I saw a man loudly protesting to an employee organizing towels, asking why he could not use his coupon benefits. In a corner of the store, there was a pile of coupons that customers appeared to have abandoned, no longer usable. When asked when the store would close, a security guard at the entrance replied, "Whenever the inventory runs out." The last glimpse of this retail giant, which failed to adapt quickly to changing times, was as lonely as the abandoned coupons.

This content was produced with the assistance of AI translation services.