Bed Bath & Beyond warns of potential bankruptcy

Bed Bath & Beyond, the beleaguered home goods retailer, warned investors Thursday about rapidly darkening prospects for its future, saying that bankruptcy was a possible option and raising doubts that it could pull off an ambitious turnaround plan it put in place just months ago.

The company could make a decision on its next steps — including whether to file for bankruptcy — within weeks, though it is possible the process will take longer, according to two people familiar with the matter who spoke on the condition of anonymity because the process is confidential.

Bed Bath & Beyond has four North Bay stores, in Santa Rosa, Larkspur, Vallejo and Vacaville.

The company has struggled for years to compete with the likes of Amazon, as more shoppers have gone online for everyday home products.

The retailer laid out a plan in August to turn itself around that included 150 store closings, cost cuts and layoffs. But it needs cash to execute those plans, and it is not clear that the crucial holiday shopping season brought in enough for it to continue without help from outside investors.

Sue Gove, who became the retailer’s permanent chief executive in October, has been focused on working through a restructuring plan to improve the company’s ailing supply chain and better stock its stores. But its suppliers remain unconvinced, and it said in a regulatory filing that it was at risk of running out of cash in the coming months.

Bed Bath & Beyond employed about 32,000 workers as of February and said in October that it had closed about half the stores it planned to as part of its restructuring.

The company, which now has roughly 900 stores across the country, reported preliminary earnings Thursday, noting lower sales and slower foot traffic compared with the previous year. The company said its sales were about $1.3 billion for the quarter that ended Nov. 26, about a third lower than the year before, when it had more stores.

The retailer estimated that it would record a loss of $386 million in its latest quarter, much worse than the $276 million loss in the previous year, and said it would need more time than expected to close its books. As of March, Bed Bath & Beyond had roughly $3 billion in debt.

The company’s share price closed nearly 30% lower Thursday, giving it a market capitalization of $150 million. At its peak in 2013, the company’s market value was $17 billion.

Show Comment