bed bath beyond

Palisades Center Sues Bed Bath & Beyond For Back Rent

Real Estate

Bed Bath & Beyond, Which Closed Its Store, Is More Than $500,000 In Arrears

By Tina Traster

EklecCo New Co LLC, the company that owns The Palisades Center sued Bed Bath & Beyond in Rockland County Supreme Court on Aug. 20th for more than $500,000 in back rent.

Bed Bath & Beyond has been a tenant in The Palisades Center since 1995.

As of January, Bed Bath & Beyond’s rent was $108,392 per month for 46,8333 square feet of space on the mall’s first floor. Last October, the company said it would be closing its Palisades Center location in June but the company was still on the hook to pay rent. The home goods store was winding down before the coronavirus pandemic triggered a statewide shutdown of most businesses including those in the Palisades Center.

In April, the tenant paid only $21,660 and from April 4 through June 30th, Bed Bath & Beyond stopped paying rent altogether.

On July 2, Bed Bath & Beyond paid a partial payment of $12,373. The mall reopened on July 10th.

As of July 31, the tenant owed $413,003. At that time, The Palisades Center sent a notice of final default and threatened legal action. On August 20, the mall owner filed suit, claiming a breach of contract and demanding damages.

Since filing suit, the retailer has accrued another $108,301 in due rent for August, bringing the total sum owed to $522,032. Rent will continue to accrue through the end of the lease term, which is January 31, 2022 unless another tenant takes the space.

Bed Bath & Beyond was in trouble prior to the pandemic. Last October, the store announced the planned closure of 40 locations. The big box retailer said it would test “lab” stores that will sell more home décor and food products. But in July, Bed Bath & Beyond said it plans to close about 200 stores over the next two years.

The Bed Bath & Beyond in Spring Valley remains open, for now.

The big box store is eliminating 2,800 jobs in an effort to streamline operations and shore up its finances amid the pandemic.

The significant reduction of corporate employees and retail workers will help Bed Bath & Beyond save $150 million in annual pretax cost savings, the company says. As of February, the retailer had 55,000 employees, so the cuts amount to 5% of its total workforce.

This “action forms part of a series of changes we are making to reduce the cost of our business, further simplify our operations and support our teams so we can emerge from the pandemic in an even stronger position,” CEO Mark Tritton said in the statement.

The home furnishings company recently appointed Wade E. Haddad as senior VP, real estate and construction, effective Sept. 2. Haddad, who joins with more than 25 years of real estate experience, will lead the company’s recently announced store optimization strategy, part of its comprehensive restructuring plan.

Haddad joins Bed, Bath & Beyond from Ascena Retail Group, where he has served as senior VP, real estate & store development since 2016. (Ascena declared bankruptcy in July.)  Prior to that, he held senior roles at Ascena’s Ann Inc. division, Klinger Advanced Aesthetics, Bieri Company, and The Taubman Company.

The home goods chain has struggled to compete with traditional retailers such as Walmart (WMT) and Target(TGT), as well as online retailers Amazon (AMZN) ad discounters like TJ Maxx and its HomeGoods arm. At Home is preparing to occupy the ground floor of the former Macy’s store at the Shops of Nanuet.