Bed Bath & Beyond defaults on its loans as bankruptcy looms trends now

Bed Bath & Beyond has said that it's in default on its loans and doesn't have sufficient funds to repay what it owes. 

The home goods chain said in a regulatory filing on Thursday that the default on the loans from JPMorgan Chase would force it to consider alternatives, including restructuring its debt in bankruptcy court.

Shares in the company based in Union, New Jersey, went into freefall, dropping 22% by the closing bell and triggering three temporary trading halts on the Nasdaq Exchange. 

It follows months of struggles for Bed Bath & Beyond, which warned on January 5 that it was considering options including filing for bankruptcy, saying that there was 'substantial doubt' that it could stay in business. 

A week later, it reported a 33% drop in sales and a widening loss for its fiscal third quarter that ended November 26, compared with same period last year. 

Sales at stores that had been open for at least a year - a key indicator of a company's health - dropped 32%.

Its recently appointed president and CEO, Sue Gove, blamed the company's poor holiday performance on inventory constraints and reduced credit limits that resulted in shortages of merchandise on store shelves.

Typically, struggling retailers file for bankruptcy protection after the holiday shopping season because they have a cash cushion coming from the two-month sales period.

Still, turning around Bed Bath & Beyond is expected to be difficult amid increasing competition from discounters. Its struggles come as the economy is weakening, and shoppers are tightening their purse strings.

It has been trying to turn around its business and slash costs after previous management's new strategies worsened a sales slump. 

Activist investor Ryan Cohen, the

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