Struggling retailer Bed Bath & Beyond has released their fiscal third-quarter results, and the disappointing numbers are pointing to further layoffs, more shuttered stores, and a possible bankruptcy filing in the not-so-distant future.
Looking at the numbers alone, the outlook is bleak. Most notably, both net sales and comparable digital sales fell 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 remains on their balance sheet. Last week, the retailer revealed that bankruptcy was possibly on the table, sharing a regulatory filing that 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.
In response, the company will continue to work with strategic advisors on how best to proceed and potentially avoid liquidation. This includes restructuring debt, making cost reductions of $80 million to $100 million, and implementing another round of layoffs. The latest stores to shutter include around 18 stores in the company’s home state of New Jersey, as well as in New York and Connecticut. The retailer will also shutter at least 16 stores in California.
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Commenting on the news, Bed Bed & Beyond CEO Sue Gove said, “we have a team, internally and externally, with proven experience helping companies successfully navigate complex situations and become stronger. Multiple paths are being explored and we are determining our next steps thoroughly, and in a timely manner. We are committed to updating all stakeholders on our plans as they develop and finalize — particularly our employees and partners, who are the essential catalysts of our business and the cornerstones of our future.”
The company will also strategize how to better attract customers and meet their expectations in an increasingly "phygital" world. On Tuesday’s earnings call, Gove emphasized the importance of providing an omni-experience for today’s shoppers. “Ease of shopping is critical,” Gove explained, “and we are committed to delivering such services as BOPIS and same-day shipping. At the same time, we are listening to our customers, and we are swiftly enacting improvements to their experience.”
The Final Days of Bed Bath & Beyond?
Bed Bath & Beyond has been beleaguered by news of store closures and falling sales for some time. In August 2022, the store revealed the plans to close 150 lower-performing stores, as well as cut about 20% of jobs across the corporate and supply chain workforce. At the time, the brand also further reduced its capital spending. Planned capital expenditures are now forecasted to be $250 million, compared to the $400 million previously disclosed. The home goods retailer has also witnessed a number of leadership changes over the past few months, with the departure of their CEO Mark Tritton after just three years, and the subsequent permanent appointment of interim CEO, Sue Gove.