Trouble is far from over for Bed Bath & Beyond, with the retailer now shuttering 150 more stores in addition to the 87 closed last week.
In a last-ditch attempt to remain in business, the retailer is also bringing on a bankruptcy expert as their interim CFO and has raised a $1 billion cash lifeline.
This latest announcement brings the total number of stores closed over the last year to 400 – around half of the 950 Bed Bath & Beyond stores open in February 2022. The company said they intend to keep 360 namesake stores open along with 120 BuyBuy Baby stores. These stores were picked for the “most profitable locations and best geographic presence for customers that can enable an optimal omni-experience,” the company said.
Bed Bath & Beyond’s potential bankruptcy has been on the table for some time. In January, the company posted disappointing third-quarter numbers, with both net sales and comparable digital sales falling 33% compared to the prior year. Suffering from low customer numbers and reduced levels of inventory availability, Bed Bath & Beyond also noted an adjusted operating loss of $225 million. Just $153.1 million in cash reportedly remained on their balance sheet.
At the time, the retailer shared a regulatory filing indicating there was “substantial doubt about the company’s ability to continue.” At the same time, the retailer’s stock dipped to its lowest point of below $2 a share. Since then, the situation has seemingly gone from bad to worse. Shares of the company were down 40% in pre-market trading after the announcement on Tuesday, and first-quarter earnings are projected to be down by around 30% to 40%.
Back in August 2022, the store outlined plans to shutter 150 lower-performing stores and cut about 20% of jobs across the corporate and supply chain workforce. Over the last few months, the retailer has also witnessed the departure of its CEO Mark Tritton after just three years, and the subsequent permanent appointment of interim CEO, Sue Gove.
Behind the scenes, Bed Bath & Beyond leaders have been hard at work trying to draw together funds, cut costs, and settle debts. In the latest step in the turnaround plan, the company has negotiated a deal to generate a $1 billion capital raise through the offering of convertible stock and warrants. “This transformative transaction will provide runway to execute our turnaround plan,” Gove said in a statement.
The retailer had been casting around for a potential buyer for some time now, but these efforts reportedly stalled in recent weeks. In addition, the company was ordered to pay up to creditors immediately, and, in a filing with the Securities and Exchange Commission (SEC) around two weeks ago, the company said that “at the time” they lacked the “sufficient resources” to settle debts with chief creditor JP Morgan Chase & Co.