Bed Bath & Beyond Lines Up Funding to Avoid Bankruptcy, Closing 150 More Stores
Bed Bath & Beyond is expecting to receive more than $1 billion in equity from a stock offering it hopes will stave off bankruptcy and liquidation, reports CNBC. The beleaguered home goods retailer will receive $225 million in the offering upfront plus an additional $800 million in proceeds over time, it said. Bed Bath & Beyond also secured another $100 million loan from Sixth Street Partners, one of its lenders.
The cash infusion will be used to pay some of Bed Bath & Beyond's debts after it defaulted on a loan with JPMorgan last month and missed a $25 million interest payment on Feb. 1, the company said in securities filings. Bed Bath & Beyond will also close an additional 150 stores to reduce costs.
Total Retail's Take: With a Hail Mary stock offering, Bed Bath & Beyond is narrowly avoiding bankruptcy in hopes of funding its turnaround plan. The retailer warned that if the deal doesn’t work out, it will “likely” file for bankruptcy and see its assets liquidated. After struggling to remain profitable for years, Bed Bath & Beyond experienced a particularly harrowing year in 2022. Former CEO Mark Tritton resigned in June after pressure from the retailer's board of directors; prior executive vice president and chief financial officer Gustavo Arnal died from an apparent suicide on Sept. 2; it closed dozens more stores, including its entire Harmon chain of drugstores; and disclosed a possible data breach in October.
Bed Bath & Beyond has been actively seeking investors willing to inject cash into the company or buy it. The efforts have evidently failed thus far, forcing the retailer to go to the public markets for funding in its latest move. Sue Gove, president and CEO of Bed Bath & Beyond Inc. said, "This transformative transaction will provide runway to execute our turnaround plan." The company press release states its recovery strategy hinges on better inventory management, a smaller store footprint, significant opportunities across its infrastructure and operations, as well as investments in its "omni-always capabilities."
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.