Text size Bed Bath & Beyond has disclosed plans to close hundreds of stores. Michael M. Santiago/Getty Images Bed Bath & Beyond failed to make interest payments on its bonds just weeks after the company warned it was considering filing for bankruptcy, yet the stock is surging higher. The company was due to pay more than $28 million on three tranches of notes on Feb. 1, totaling about $1.2 billion, a company spokesperson confirmed over email. The Wall Street Journal reported the news on Wednesday. Bed Bath (ticker: BBBY ) has now entered a 30-day grace period to make good on the payments, the spokesperson said. But paying back its debt may be challenging for the cash-strapped retailer. A week ago, Bed Bath disclosed that its creditors had demanded the company pay back its debts in full after the company was unable to prepay a so-called overadvance on a credit facility, triggering “events of default.” “At this time, the Company doesn’t have sufficient resources to repay the amounts under the Credit Facilities and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the US Bankruptcy Code,” Bed Bath said in a quarterly filing to the Securities and Exchange Commission. “Multiple paths are being explored and we are determining our next steps carefully, and in a timely manner,” the spokesperson said. Bed Bath recently announced plans to close 87 Bed Bath stores, five buy-buy Baby stores, and all 50 Harmon locations, in addition to 150 previously announced store closures. But as Barron’s previously reported, Bed Bath’s options may be dwindling. With the company unable to pay back its current debtors, it will be harder to secure another loan to tide it over for another couple of months, experts say. Ever since the start of the meme-stock trading frenzy a few years ago, the stock—a favorite among retail traders—has been prone to big swings. Meme traders seemed to be back on Thursday, sending the stock soaring as much as 23% higher in early trading. The stock was 14% higher at $3.21 in mid-morning. Write to Sabrina Escobar at sabrina.escobar@barrons.com