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Bed Bath & Beyond warns that it may go bankrupt
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The home-goods giant Bed Bath & Beyond says it's running out of money and may need to file for bankruptcy protection — or worse.
Its stores have seen fewer shoppers and declining sales as the retailer has struggled to find its footing in recent years through a series of poorly timed or otherwise lackluster turnaround strategies.
Now Bed Bath & Beyond "has concluded that there is substantial doubt about the company's ability to continue as a going concern," the retailer said on Thursday. This means Bed Bath & Beyond has to consider all financial options, including restructuring, selling assets or going through bankruptcy.
"These measures may not be successful," the company added. Its stock price dropped more than 20% as soon as markets opened.
Bed Bath said it expects to report sales declining by 33% compared to last year for the quarter that ended right after Black Friday, a reflection of "lower customer traffic and reduced levels of inventory availability." The forecast suggested losses would increase by almost 40% to $385.8 million.
The company plans to offer further details on Jan. 10, when it was scheduled for a financial report to investors.
Bed Bath & Beyond has faced a crisis after crisis in recent years: a rise and crash as a meme stock, a leadership shakeup, trouble with suppliers, a turnaround intended to improve upon a previous turnaround, store closures, job cuts, and the shocking news of its financial chief's death.
Most notably, Bed Bath & Beyond missed out on the shopping boom that the pandemic brought to many home-goods sellers, as the company was in the middle of an overhaul that involved replacing big name brands with more private brands. The new-brands turnaround strategy exacerbated the industry-wide supply chain crisis, leaving top products like KitchenAid mixers missing from Bed Bath's shelves. Its website also lagged behind peers.
Meanwhile, activist investor Ryan Cohen of Chewy and GameStop fame bought a stake in the company last year, prompting his followers on Reddit and YouTube to pump up Bed Bath's stock. The CEO and other leaders were ousted — and then, just as suddenly, Cohen sold his entire stake.
All this launched Bed Bath & Beyond on what's become a familiar timeline of a rudderless retailer: In September, the company announced closures of another 150 stores and job cuts for a fifth of its corporate and logistics staff. Suppliers began hesitating about sending more stuff to Bed Bath, worried they won't get paid.
Late summer, the company had secured financing that propelled it through the holiday shopping season. Now the retailer is trying to refinance its debts, facing waning enthusiasm from creditors.
Copyright 2023 NPR. To see more, visit https://www.npr.org.
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