It also made preparations to sell additional shares, a move that would dilute current shareholders and that caused the share price to fall. Shares fell more than 20% early Wednesday.
The announcements, including the layoff of about 20 percent of corporate and supply chain staff, were part of a strategic update just days after the end of the company’s most recent quarter. The retail chain reported comparable sales plunged 26% in the quarter ended Aug. 27, and its operations drained about $325 million of its cash reserves.
Bed Bath & Beyond said it has secured more than $500 million in new financing, which includes expanding an existing line of credit. The a new lifeline as the company is run by
& Co. and Sixth Street Partners. The Wall Street Journal has already reported on the company was close to a new loan deal.
The retailer said its board had decided not to sell its buybuy Baby chain, which operated 135 stores as of May. The company had hired advisers to explore a potential sale of buybuy Baby. Overall, Bed Bath & Beyond had a total of about 955 stores as of May 28.
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The Union, New Jersey-based retail chain on Wednesday also filed a shelf registration form, the legal documentation for a relatively quick sale of stock when it determines market conditions are favorable. The company said it may sell up to 12 million common shares and may use the proceeds to pay down some of its debt.
Shares of Bed Bath fell about 24% to about $9 in early trading on Wednesday. the shares a favorite among meme investors, has lost almost half its value in the past two weeks. Its market capitalization has fallen below $1 billion in recent weeks, having not traded near those levels since the early months of the pandemic.
The home goods retailer that ousted Mark Tritton as chief executive in June amid a decline in sales, said Wednesday that it plans to undo much of the merchandising and inventory strategy it has implemented. Mr. Tritton, Ex
executive director, joined the company in 2019 and tried to turn the retailer around by going deeper into private labels among other initiatives. However, these brands were not well received by buyers and were hampered by pandemic-related supply chain constraints.
The company said it would discontinue a third of its own brands and refocus on national brands. On Wednesday, it said its chief operating officer and director of stores were leaving and that their roles had been eliminated.
The company is led on an interim basis by board member Sue Gove, a former retail executive and retail restructuring adviser. He said he had hired search firm Russell Reynolds to find a permanent CEO and that the search process was ongoing.
Bed Bath & Beyond said the announced restructuring moves are expected to reduce costs by about $250 million in the current fiscal year. It also cut its full-year forecast for capital spending by $150 million.
The company, known for its rich stores with a wide selection of home goods and 20% coupons, has struggled for years with declining sales and more recently with a shrinking pile of money. It ended May with approximately $100 million in cash reserves.
The retailer was dealt another blow when billionaire activist Ryan Cohen sold out his 10% stake in the company, about six months after acquiring his shares. The company’s shares, which had risen in previous weeks, fell after people followed Mr Cohen’s sell-off.
The company plans to release its full second-quarter financial results on September 29.
Last week, S&P Global Ratings cut the company’s credit rating deeper into junk territory and assigned a negative outlook, indicating it could downgrade again in the near future.
Write to Inti Pacheco at [email protected]
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