Bed Bath & Beyond has defaulted on its loans and doesn’t have enough money to repay what it owes, the retailer said Thursday.
The home goods chain disclosed the default in a securities filing that said it was considering alternatives — including restructuring its debt in bankruptcy court.
The filing isn’t the first time Bed Bath & Beyond has hinted at bankruptcy. The company warned earlier this month had “high doubts” he could stay in business. The retailer recently reported a 33% drop in sales and a widened loss for its fiscal third quarter ended Nov. 26, compared to the year-ago period.
CEO Sue Gove blamed the poor performance on inventory constraints and reduced credit limits which resulted in shortages of goods on store shelves. Wall Street analysts and consumer behavior experts told CBS MoneyWatch that Bed Bath & Beyond committed self-sabotage years ago by failing to pivot to e-commerce fast enough, buying back too much of its own stock and trying sell private label products that consumers did not. do not like
Neil Saunders, managing director of GlobalData, said in a research note on Thursday, “underline the company lives on both borrowed time and money. “Course of a miracle in the form of a sale of part of the business or a loan in the hands of an investor, the most likely outcome is bankruptcy.”
A spokesperson for Bed Bath & Beyond told CBS MoneyWatch that the company has “a team with proven experience helping companies successfully navigate difficult situations and grow stronger.”
Still, turning around Bed Bath & Beyond should be difficult amid rising discount competition. Its struggles come as the economy weakens and shoppers tighten their wallets.
Bed Bath & Beyond experienced a surge in investor popularity last year as Ryan Cohen, the billionaire founder of pet food company Chewy, bought more than 7 million shares of the company. It sold these shares last August in a move that made him $ 178 million and that caused a big sale among investors meme stock. The company made headlines again in September when its senior financial officer died unexpectedly after jumping from a skyscraper in New York.
The New Jersey-based retailer is trying to turn things around and cut costs after previous management strategies exacerbated a sales slump. The company announced in August it would close about 150 of its stores and cut its workforce by 20%. It has also put in more than $500 million in new funding.
Bed Bath & Beyond’s stock price fell 22% on Thursday to $2.52 a share.
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