Bed Bath and Beyond (BBBY) has seen downward trends hit its business since struggling before the pandemic hit. The struggles continued while online retail sales were up, Bed Bath and Beyond still didn’t see the sales that other retailers like Target saw during 2020. Bed Bath and Beyond wasn’t seeing results and fired its recently hired CEO Mark Tritton, formerly the chief of merchandising at Target.
Bed Bath and Beyond cut brands from its retail floors under Tritton. Tritton had previously led successful changes in brands and products launches with both Target and Williams Sonoma, but the attempt made at Bed Bath and Beyond was not successful. The company’s then CFO Gustavo Arnal was accused of participating in a ‘pump and dump’ scheme. Where the company would manipulate data or other information in order to boost the stock prices and then sell at the inflated rates. After the accusations, then Arnal died by suicide.
Bed Bath and Beyond ended its fiscal year 2022 in the red, and per its Jan. 5 regulatory filing, there was “substantial doubt” about the company’s ability to remain a going concern. The company has avoided filing for bankruptcy, but attempts to turn the company around have proven unsuccessful. Bed Bath and Beyond, however, was able to raise $225 million through an equity offering in Feb. 2023.
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Bed Bath and Beyond Offers Up $300 Million in Stock
The home goods retailer is up against a tight timeline to be able to pay its bills. In February, the influx of cash through its equity offering raised a substantial amount of cash, but now one month later, Bed Bath and Beyond is up against the wall again. This time the ‘plan’ is to try and sell $300 million of its stock to be able to pay its bills and continue to fund the business.
The sale of the Bed Bath and Beyond common stock will be offered through B. Riley Securities inc. The maximum amount of stock sold is set at $300 million, and the sale price may vary depending on the market.
The company once had roughly 1,500 stores and now after its closing more than half of its locations, the retailer is heavy in debt with sales continuing to drop. Bed Bath and Beyond is expected to file for bankruptcy if it is not able to raise $300 million in stock sales. The company has roughly 760 stores left and has plans to close another 400 stores, keeping only the profitable stores open, which appears to be only 360 stores.
“The actions we’ve taken have enabled us to create the necessary financial runway to begin restoring our iconic Bed Bath & Beyond and buybuy BABY businesses. We have raised $360 million of equity capital since the beginning of February, cured our default under our credit agreement, repaid material amounts of our ABL facility, completed our interest payment for our Senior Notes, all while jumpstarting our turnaround plans,” said Sue Gove, president and CEO of Bed Bath and Beyond, according to Quartz.
Bed Bath and Beyond Efforts in Vain
The retailer's efforts to restructure and save the company come after many failed attempts at trying to save the company. Hudson Bay Capital Management was the lead investor for the February 2023 equity offering. By March 2023, Bed Bath and Beyond terminated the deal with Hudson Bay Capital Management.
The efforts made by Bed Bath and Beyond to declutter its stores and carry less may have sounded good on paper, but when it went into practice it left its customers dissatisfied. With products dwindling the "Beyond" part of the business suffered, as many loyal customers were accustomed to shopping at the retailer first before going to competitors Target or Home Goods. Customers used to be given many brand options, and after the structural decluttering of its aisles, it left customers disheartened by the changes made.
