The chaotic work of liquidating Bed Bath & Beyond’s Harmon stores

It had been a busy but successful holiday season at the Harmon Face Values store in Morris Plains, New Jersey.

The location performed well enough to win a contest among the entire health and beauty chain’s stores involving sales of appliances such as blow dryers and electronic toothbrushes. Jenny Bonard, the manager, was looking forward to a visit from the district manager and Harmon’s head of merchandising to discuss upgrades to the store. She hoped that lights would be added, helping to illuminate the shelves and enticing shoppers to spend more.

Instead, on Jan. 26, after a brief conference call in which executives from Bed Bath & Beyond, Harmon’s parent company since 2002, shared their decision to liquidate all 49 of the chain’s stores, Bonard found herself texting her employees to tell them they would soon lose their jobs. She didn’t know exactly when. And there were questions about issues including health insurance and severance pay. But it was coming.

“We all cried,” said Bonard, 44, who had been with Harmon for eight years. “It was just absolute disbelief that this was happening.”

The decision to shutter the Harmon chain came as Bed Bath & Beyond was fighting for its corporate life. Sales at the home goods chain had declined 33% from the year before and it had negative cash flow in its most recent quarter. The company was in the midst of a revamping that included closing about 200 of its Bed Bath & Beyond stores and its Buy Buy Baby locations. Its new CEO, Sue Gove, was frantically trying to mend ties with suppliers wary of the company’s financial health, and trying to persuade shoppers to come back.

On the same day it announced that it would liquidate Harmon, Bed Bath & Beyond disclosed to investors that it had defaulted on debt payments to JPMorgan Chase.

Before the liquidation announcement, many at Harmon said they thought they would be insulated from the financial tumult. Several said their bosses had told them that Harmon was profitable. (Bed Bath & Beyond does not publicly break out sales for the chain.) Workers were being told to expect bulk deliveries of merchandise, after months of product shortages, after some of Bed Bath & Beyond’s large vendors placed credit holds on the company. Some thought it was possible that Harmon might be sold, as Bed Bath & Beyond did with Cost Plus World Market in 2021.

A complete shutdown did not seem likely.

“We thought for sure we’d be saved,” Bonard said.

It wasn’t until late February when they were given a week’s notice.

In an email, a Bed Bath & Beyond spokesperson, Julie Strider, called the decision to close Harmon a “difficult” one but part of the company’s plan to move “expeditiously toward a smaller and more profitable store footprint.”

She added, “It is one of many important actions we are taking to enable Bed Bath & Beyond to improve our financial position and serve our customers well into the future.”

Two days after liquidation was announced, employees were tasked with shutting down the stores, which some had worked at for more than two decades.

Sale signs started going up. At a store in Yonkers, New York, Harmon workers initially had to print out the 20% off signs on white Xerox paper before official ones were sent to the store.

Employees said the monthlong process was chaotic and opaque. District managers were let go, meaning at times store managers had to go through the third-party liquidator to receive some answers from the company’s corporate office. Assistant managers spent their days climbing ladders to change signs to reflect new discounts — from 20% off to 30% off to 80% off. Eventually, shoppers could get a basket’s worth of goods for $10.

It led to long lines snaking away from the registers, which were sparsely staffed. The constant price changes meant cashiers had to manually ring up shoppers’ items, which increased shoppers’ wait times and led to impatient customers.

As the shelves grew emptier, workers had to keep moving merchandise around to have it at eye level for shoppers. Customers would ask when the stores’ last day would be. Harmon workers, who didn’t know the answer, said customers would often get frustrated or emotional because they were losing a store they patronized often.

One former store employee was waiting for her disability check and didn’t know if it would still be processed. Another was concerned that she would have to cancel a planned medical procedure because it was unclear how long her medical coverage would last.

“They moved it very fast,” Anthony Ferraioli, an assistant manager in Wayne, New Jersey, said of the liquidation. “It was very insensitive to the employees.”

Retail liquidations always have some level of chaos and confusion, experts say, because they involve rampant price markdowns, dwindling numbers of products on the shelves, frustrated customers at checkouts and soon-to-be unemployed workers trying to keep them happy while also updating their own résumés.

The goal for the liquidating company is to make as much money as it can on its merchandise and to vacate its stores as soon as possible. The more time spent there, the more rent it has to pay.

“At the point that a retailer or manufacturer decides to liquidate, by the time that happens, they’re not thinking about the workers anymore,” said Tony Sciarrotta, executive director of the Reverse Logistics Association, an industry trade group. “They haven’t got the money to think about the workers.”

But retailers still need to keep enough employees in a store to help it wind down operations. Bed Bath & Beyond offered retention bonuses for its store managers ($2,000) and assistant managers ($750). However, lower-level employees who were also doing taxing work in the store did not receive any monetary incentives.

In early February, Bed Bath & Beyond executives held a virtual town hall to announce that they had secured a deal to raise more than $1 billion, helping them sidestep a bankruptcy the company had warned investors about. Gove was smiling, and members of her management team explained how this was positive news, according to Bonard, the former store manager in New Jersey.

As executives explained their feat, a group of Harmon workers listened in, wondering if they would be told when their last day would be. (That answer would not come until Feb. 20, when employees were told the stores would close in a week.)

Afterward, Harmon managers started emailing Gove, voicing their displeasure at how their parent company was handling the liquidation.

The last Harmon stores closed on Feb. 26. Two days later, Bed Bath & Beyond was able to make a payment on its debt that it had defaulted on earlier in the month.