Bed Bath & Beyond Will Shutter 150 Stores, Cut Staff, and Sell Shares to Raise Cash
Hopes for a Turnaround
As Bed Bath & Beyond (BBBY) slogs through 2022, it’s laying out its plans to try and reverse its fortunes. Around 150 of its flagship stores will be closed and the company will be laying off workers in a bid to free up cash.
In all, close to 20% of Bed Bath & Beyond’s corporate or supply-chain staff are being let go. The company just reported sales fell 26% during its most recent quarter, all while burning through around $325 million of its cash reserves. It’s been an especially challenging run for the stock in recent weeks, during which time meme investors bought and sold shares, and its share price ultimately fell almost 50%.
Rally No More
Prior to the stock’s extended selloff, Bed Bath & Beyond had been on a tear, as investors who gathered on Reddit pushed its share price higher. It plummeted when activist investor Ryan Cohen sold off his 10% stake in the retailer, which led many of those same meme stock investors to sell their holdings in response.
That’s not the only relevant portion of the story for Bed Bath & Beyond, however. Sales have been on the decline for years and the company’s cash reserves have been steadily dwindling. Bed Bath & Beyond also faces a poor credit rating, and is looking to generate some cash. To that end, the company says it could sell up to 12 million shares of its common stock, which would then help it pay down debt.
What’s on Deck?
Bed Bath & Beyond notes it has secured over $500 million in new financing. The retailer also says spending will be cut by around $250 million in its current fiscal year as a result of the restructuring.
The company says it’s looking to switch up its merchandising and inventory strategy, noting its most recent game plan left it exposed to supply chain disruptions. It’s also decided against selling its buybuy Baby chain, something the board considered previously. Watching firms respond to meme stock rollercoaster rides appears to be a thing of 2022, and Bed Bath & Beyond is up next.
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