One of the most iconic lifestyle brands in the United States may soon be no more.
On Thursday, January 5th, Bed Bath & Beyond canceled a proposed debt exchange, issuing a statement that current circumstances may lead to its eventual closure. This resulted in the company’s share value falling by 25%, settling at $1.27 per share during Friday trading in New York.
The company’s 2024 notes also fell, falling from their January 5 value of 12 cents to a dollar to just 8 cents during trading on the following day.
Bed Bath & Beyond also warned that its third-quarter revenue stood at $1.259 billion, lower than the previous estimate of 1.404 billion and a sharp decrease from the $1.878 reported at the same time in 2021. The company also disclosed that it expects a net loss of approximately $386 million for the three-month period that ended last November 26th. This is 40% higher than the losses reported in the previous year.
This major drop in the company’s Q3-2022 revenues is an indication that it did not fare well during the critical holiday shopping season.
What’s Been Happening?
The New Jersey-based company is beginning to file for bankruptcy within the first quarter of this year. Bed Bath & Beyond also disclosed that, while it has taken steps to improve its financial standing, it is unlikely that it can stay operational due to numerous losses in the past year. The company added that its cash flow has been practically zero for the nine-month period which ended last November 26th.
Bed Bath & Beyond has worked on restructuring its debts and sold a number of assets over 2022 to help its cash position along. But even with its impending bankruptcy filing, these measures have barely helped at all.
As of press time, however, a Bed Bath & Beyond representative stated that the company has yet to make any final decisions regarding its plans to improve its liquidity or regain its market share.
What Happens Now?
The canceled debt exchange was supposed to reduce the company’s overall debt by giving creditors an opportunity to trade unsecured bonds for newer secured obligations with a considerably lower face value. However, it was determined that the offer could lead to complications in the event of bankruptcy.
Likewise, a number of Bed Bath & Beyond suppliers stopped shipping to it over the past several months over their concerns as to the company’s current financial status and its grim forecast for 2023.