Bed, Bath & Beyond Survival Concerns; Stock Collapse
Shares of Bed Bath & Beyond fell to their lowest level in three decades after the homewares retailer said it was struggling to keep its stores open. The path may be to seek protection from creditors and terminate the operations. The retailer said it had “significant doubts about its ability to continue” due to “lower customer traffic and lower inventory levels”.
The shares, which were trading at historic lows, lost more than 20% this morning. The American appliance chain is facing a sharp drop in sales and growing difficulties in refinancing its debt. Quarter after quarter, the network racked up disastrous results, burned cash and reduced survival alternatives.
The company expected its fiscal third-quarter revenue to decline more than 30% from the same period a year earlier, leading to a 40% increase in losses to $385 million. The results are expected to be announced on January 10. But the retailer said it would need more time to review the numbers.
In August, the company was able to breathe after the filing of a restructuring plan and access to lines of financing which helped it through the period of the end-of-year sales. But the financial breather is coming to an end. When the adjustment plan was announced, shares reacted, hitting $23 in August last year.
They are now trading under $2, down almost 90%. Bed, Bath & Beyond said it was considering possible alternatives, including debt reorganization, capital appreciation and asset sales.