Bed Bath & Beyond closes stores and raises $1 billion to avoid bankruptcy

new York
CNN
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Bed Bath & Beyond is closing 150 more stores – just a week after the struggling retailer announced the closure of 87 locations.

The company’s physical footprint has already shrunk significantly, according to a regulatory filing released late Monday, and the new closures mean it will have closed 400 stores over the past year, nearly half of the roughly 950 stores which it had opened in February 2022.

This includes last week’s announcement that it was also closing the remaining 49 Harmon Face Value stores, which sold cosmetics; plus 5 buybuy Baby slots. A list of new store closures was not immediately available.

A turnaround doesn’t seem imminent: The struggling home goods chain predicts first-quarter sales to be down 30% to 40% with “sequential improvement in quarterly sales thereafter,” according to the filing.

The company said on Tuesday it raised some $1 billion through a preferred stock and warrant offering in a last-ditch effort to avoid bankruptcy. On Monday, the company announced that it had named Holly Etlin, a bankruptcy expert, as interim chief financial officer.

Bed Bath & Beyond announced on Tuesday that it will eventually have 360 ​​stores and 120 buybuyBaby stores. This means the company will have announced plans to close nearly 500 of the stores it owned just a year ago, and the new company will be about half the size of the old one.

The chain has said in recent weeks that it has defaulted on a loan and may not be able to stay in business, raising concerns about its future. Bed Bath & Beyond has held talks in recent days with an investment firm to underwrite a significant portion of the proposed offering, according to Reuters.

Bed Bath and Beyond has been part of the meme stock phenomenon, with shares skyrocketing as much as 400% in the last year when activist investor and GameStop chairman Ryan Cohen took a stake and asked for changes.

Shares of the retailer, which closed 92% higher at $5.86 in a rollercoaster session on Monday, were down 40% in premarket trading on Tuesday.

Founded in 1971, Bed Bath & Beyond has become a go-to for affordable home decor, kitchenware and college dorm furniture. It’s also known for its ubiquitous blue 20% off coupons and cavernous stores with merchandise stacked to the ceilings.

But the company has struggled to make the transition to online shopping and fend off big chains such as Walmart and Target (TGT). Many shoppers turned to these competitors as the novelty of Bed Bath & Beyond’s coupons faded.

The company has also been hit hard during the pandemic, temporarily closing stores in 2020 while rivals remained open. The company lost 17% of its sales in 2020 and 14% in 2021.

– Nathaniel Meyersohn of CNN and Reuters contributed to this report