How Bed Bath & Beyond sidestepped bankruptcy… for now
Bankruptcy attorney: ‘The billion-dollar cash raise was a Hail Mary’
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Bed Bath & Beyond continues to evade bankruptcy, after implementing a series of financial moves, including raising $1 billion through preferred stocks and closing all its store locations in Canada.
People walk past a Bed Bath & Beyond store on Oct. 1, 2021, in the Tribeca neighborhood in New York City. (Michael M. Santiago/Getty Images / Getty Images)
In an interview with FOX Business, Tyler Dischinger, counsel in Buchanan’s bankruptcy practice group in Pittsburgh, said, "The billion-dollar cash raise was a Hail Mary."
BED BATH & BEYOND MOVES TO SECURE $1B TO AVOID BANKRUPTCY
"The market anticipated a bankruptcy filing by the end of the first quarter, but that seems less likely now," he continued. "It’s hard to put a timeframe on their additional runway, but the company will use this time to get on good terms with lenders while continuing to shrink their brick-and-mortar footprint."
BED BATH & BEYOND REPORTEDLY SELLING ASSETS
"Cost-cutting and financial moves have bought them some time, but it’s too early to see if it’s a little too late," he finished.
A court filing shows the Canadian division includes 54 stores and 11 BuyBuy Baby stores, 387 full-time and 1,038 part-time jobs. The filing also says Bed Bath & Beyond Canada cannot restructure its operations without support from its American parent company and its lenders.
BED BATH & BEYOND SALES SINK, WILL CLOSE 150 STORES
Following a dismal third quarter earnings report in January, where net sales slipped 33% to just $1.259 billion and comparable sales fell 32% on a 70% drop in customer traffic, the retailer announced plans to close 150 store locations by the end of fiscal 2022 and initiated incremental cost reductions of approximately $80 million to $100 million, including overhead expense and headcount.
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According to the report, the expense reductions put the retailer on track to deliver roughly $500 million in yearly savings.