When retail giant Bed Bath & Beyond faced a liquidity crisis, it brought in AlixPartners to advise on how to steer the 32,000-employee firm through bankruptcy protections and a possible divestment.

AlixPartners' Managing Partner Holly Etlin was brought in to serve as CFO for the troubled retailer as it prepared to file for Chapter 11 and evaluate its value to the right buyer, positioning the company’s assets in the best possible light. We helped the struggling retailer to reach a credit agreement amendment that took its revolving debt down to $565 million from $1.13 billion.

Moving into the transitional period, our team was tasked with assessing divestitures’ complexity, designing the transition services agreements (TSAs), and managing the separation management office to ensure sustainable deal value. The assessment phase accelerated the buyers’ due diligence process, allowing both deals to close within two months of the deal announcement.

We identified overall stranded cost opportunity of around $30-50 million, which included redefining the target operating model and rightsizing vendor contracts. Our plans detailed the transition of merchandising, warehouse management, store operations, e-commerce platforms, and corporate applications, along with infrastructure and network separation. We also established a governance and clearing-house model with the new company for managing requests under the scope of the TSA.

Related case studies