US homeware retailer Bed, Bath & Beyond has filed for bankruptcy and has commenced a liquidation sale process.

The 52-year-old omnichannel brand sells a range of merchandise primarily in the home and baby markets such as decorative homeware and lifestyle goods, accessories and textiles.

At the start of the third quarter, the company implemented a turnaround plan with a refocus on merchandising and inventory control in a bid to strengthen its financial position following a loss of US$451 million over the Christmas-New Year trading period.

However, the company failed to acknowledge its longstanding issues with debt, failure to compete with rivals and adapt to changing customer needs, margin erosion and lack of product differentiation drove the business to collapse.

Neil Saunders, MD of GlobalData, said the decision was a “long time coming” when trading deteriorated sharply for the business.

“If there is a single point of failure of Bed Bath and Beyond, it’s that the company 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 suggested the Bed, Bath & Beyond brand can operate as an online-only model though it will remain a “shadow of its former self”. However, the Buybuy Baby business might attract potential bids.

To facilitate the sale, the company has received $240 million in debtor-in-possession financing from Sixth Street Specialty Lending which will provide the necessary liquidity to support operations.

The company’s 360 Bed Bath & Beyond stores and 120 Buybuy Baby stores and websites will remain open and continue serving customers while the process continues.

Sue Gove, president & CEO of Bed Bath & Beyond Inc, said the business remains “steadfastly determined” to serve customers, partners and the community throughout this process.