Staring Down Bankruptcy, Bed Bath & Beyond Says It Will Sell Stock
Bed Bath & Beyond, the struggling home goods retailer, announced plans for a public offering on Monday, a move that it hopes will allow it to pay off its debts and possibly stave off bankruptcy.
Bed Bath & Beyond did not immediately respond to a request for comment.
Early last month, Bed Bath & Beyond warned investors that bankruptcy was a possible option, if it could not otherwise raise money after a disappointing holiday season. It said that its sales in the run-up to Black Friday were a third of what they were in 2021.
The retailer said on Monday that it had plans to raise a little over $1 billion in equity offerings, alongside tapping $100 million from its credit facility, to repay outstanding loans. It did not say whether the cash it hoped to raise would be sufficient to fund the business and therefore delay any impending bankruptcy filing.
Bed Bath & Beyond in August secured $500 million in new financing, including a $375 million loan from the investment firm Sixth Street and an expanded debt facility led by JPMorgan Chase. The retailer disclosed last month that JPMorgan had informed Bed Bath & Beyond that it had defaulted on its debt.
At the same time, the retailer has become a favorite of meme stock traders, retail investors who bid up the shares of undervalued companies. On Monday its stock surged nearly 100 percent, giving it a market value of around $690 million. Its stock has swung wildly in the past few weeks as traders placed bets on its fortunes.
At its peak in 2013, Bed Bath & Beyond had more than 1,500 stores and a market value of about $17 billion. Its home-goods emporiums full of towels and kitchen aids — all available at a reduced price with that big blue coupon — were beacons that kept shoppers coming back.
As of last February, it had about 32,000 employees. It has since gone through several rounds of layoffs. It now has less than 800 stores. In August, the company announced an aggressive restructuring plan, saying it would close 150 stores and lay off more workers.
Bed Bath & Beyond’s inventory levels had dropped to less than half by the end of December, according to the research firm DataWeave, a signal that the brands that sell to the store have been pulling back, fearful that they might never be paid for the products. they had sent it.