Bed Bath & Beyond sounds bankruptcy warning — again
Bed Bath & Beyond is once again warning that it may have to file for bankruptcy.
In a SEC filing on Thursday, the struggling home goods, which is looking to raise more capital, retailer advised that if its proposed $300 million stock offering doesn’t come off, it would “likely” have to file for bankruptcy protection.
In February, Bed Bath & Beyond said it had completed a stock offering that was expected to bring some $1 billion in equity to the company. The retailer said it had so far raised $360 million through the deal, repaid its loan defaults and made all interest payments for senior notes.
Bed Bath & Beyond said it would use the proceeds from the new offering with B. Riley Securities to repay its credit facility and secure more merchandise for its stores.
“We likely would be required to file for bankruptcy protection if the company does not receive the proceeds from the offering covered by this prospectus supplement, the company would not have the financial resources to satisfy its payment obligations under the credit facilities, and the company expects that it will likely file for bankruptcy protection and that its assets will likely be liquidated,” Bed Bath & Beyond stated in the filing on Thursday.
The retailer added that it has hired advisors to explore strategic alternatives, including, if needed, filing for bankruptcy protection.
Also on Thursday, the company released preliminary fourth-quarter results that included a comparable store sales drop in the range of 40% to 50%. Net sales were estimated at approximately $1.2 billion, compared to $$2.05 billion in the year-ago quarter.
“We are on pace to achieve our target of 360 top-performing Bed Bath & Beyond stores by the end of April, in addition to our existing 120 Buybuy Baby stores,” stated Gove. “In conjunction with our online business, these productive stores are pivotal to our omnichannel strategy and future profitability. As demonstrated by our plans for additional equity capital, our work remains focused on creating operational and financial avenues for further progress.”
In February, Bed Bath & Beyond gave a “strategic update” on its plan to save its ailing business which included "incremental" store closures to shrink its total U.S. store to approximately 360 Bed Bath & Beyond stores and approximately 120 Buybuy Baby stores. (The company also announced it was shuttering its Harmon chain.)