Bed Bath & Beyond warns of continuing business continuity

The struggling company saw dismal holiday sales.

NEW YORK. Beleaguered Bed Bath & Beyond warned on Thursday that it may have to file for bankruptcy protection as it struggles to attract buyers.

Home improvement retailer Union, New Jersey, said it was considering several options, including selling assets or restructuring its business in bankruptcy court. But he acknowledged that even those efforts may not succeed.

Its shares fell 30% to close Thursday at $1.69, the lowest level since November 1992.

“There are serious doubts about the company’s ability to continue in business for the foreseeable future,” the retailer said in a statement.

The company’s valuation was made as its dismal performance continued through the holiday season.

Bed Bath & Beyond said it expects a $1.26 billion net sales report for the third quarter ended Nov. 26. This is 32% less than a year earlier. It also expects a net loss of approximately $385.8 million in the third quarter, up from a loss of $276.4 million the previous year.

The company’s newly appointed CEO and president, Sue Gove, blamed the poor performance on product shortages and reduced credit limits, which led to shortages on store shelves.

In August, Bed Bath & Beyond announced that it would be closing stores and laying off workers to change its business. He closed about 150 stores of the same name and reduced the staff by 20%. These cuts are estimated to save the company $250 million in the current fiscal year. It also said in August that it had raised over $500 million in new funding.

mired in a prolonged sales slump, the company announced back in August that it would return to its original strategy of focusing on national brands rather than promoting its own brands.

It changed the strategy of former CEO Mark Tritton, who was fired last June after less than three years at the helm. The company said it would be getting rid of one-third of its store brands, which began rolling out in the past year or so. In addition to Bed Bath & Beyond, the company also operates the Buybuy Baby and Harmon chains.

Neil Saunders, managing director of GlobalData Retail, wrote in a report Thursday that Bed Bath & Beyond is “too far gone to be kept in its current form.” He noted that the company could do a Chapter 11 restructuring, but would still need to come up with a solid business renewal plan, which would not be easy, especially in a weakening economic environment.

“The catalog of errors has stymied the company and rendered it increasingly useless,” he wrote. “Only very drastic actions will allow him to survive, and even if he does, he will be a shadow of himself.”

The company is set to release final third-quarter results on Tuesday.

Content source

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button