Bed Bath & Beyond is reportedly preparing to file for bankruptcy within days, ending a disastrous few years for the homeware giant.
The collapse of the retailer, according to the Wall Street Journalas the plummeting stock price may cause the company to default.
After several catastrophic years plagued by supply chain disruptions and the tragic suicide of its CFO, the retail giant is on the brink of bankruptcy despite announcing a string of store closures and staff layoffs.
To avert Chapter 11 bankruptcy, also known as “reorganization” bankruptcy, the company recently said it needed to find $300 million in share sales by April 26.
But as of April 10, the company had reportedly raised just $48.5 million from stock sales. With 178 million shares still available at the time and a Wednesday share valuation of just 46 cents at close, the sale of the remainder of its shares would net the retailer no more than $80 million.
The once mighty company has been one of the stores hardest hit as the “retail apocalypse” swept the country, with reports early in the year showing a 40 to 50 percent drop in store sales for the financial quarter that ended in February.
Bed Bath & Beyond will reportedly file for bankruptcy by the weekend
The company once thrived during the pandemic, commanding 1,500 stores in the US, before being hit by a tumultuous few years
More than 800 store closures have been announced for this year across numerous iconic brands, with Tuesday Morning and Foot Locker closing hundreds of locations.
And amid a tumultuous few years, including the tragic suicide of its CFO in September 2022, Bed Bath & Beyond previously warned it would be forced to file for bankruptcy if it failed to salvage its failing bottom line.
The company also warned that bankruptcy would mean liquidating its assets.
The collapse came after a period of relative success, during which the Covid-19 pandemic left homeowners trapped indoors, soaring demand for Bed Bath & Beyond stock.
The company attempted to launch a range of new products in 2021 to capitalize on the new demand. But when the retailer then faced supply chain problems, the company’s bold plan suffered.
Bed Bath & Beyond would lose millions in its unsold inventory, sparking a prolonged period of decline that has resulted in reports of imminent bankruptcy.
Facing a poor financial outlook, the company kicked off 2022 with a devastating earnings report that showed net sales fell 28% while net losses increased by more than $75 million.
In April, the company reported that it had a net loss of $159 million, compared to a profit of $9 million the year before, according to Retail dive.
With the company’s finances booming, CFO Gustavo Arnal, 52, jumped from his 18th-floor apartment to his death in Manhattan in September.
His suicide came days after the embattled retailer announced it would close stores and lay off workers, alongside news that Arnal – as well as the company – was being sued over allegations it had artificially inflated the company’s share price in a ‘pump and dump’. ‘-regulation.
Facing a bleak financial outlook, the retail giant has also identified that at least 416 stores in the US and 46 Canadian stores will close before the end of 2023. While it once owned more than 1,500 locations across the country, it previously announced plans to close out the year. with only 480.
Bed Bath & Beyond CFO Gustavo Arnal, 52, committed suicide in September 2022
Arnal, right, jumped to his death from the 18th floor of Manhattan’s “Jenga” tower — two days after the company announced plans to lay off thousands of employees and close 150 stores
Amid reports that the company has filed for bankruptcy, Bed Bath & Beyond also faces another financial deadline.
Lenders Sixth Street Partners and JP Morgan Chase & Co. are reportedly demanding that the retailer raise $232 million by June 27.
Last month, the struggling company also terminated a financial deal with hedge fund manager Hudson Bay Capital Management that would have seen the homeware company provide up to $1 billion to fund a resurgence.
Bed Bath & Beyond isn’t the only major US store struggling, though, with many iconic brands also announcing a slew of store closures.
By the end of 2023, nearly 850 big-box stores will close as retailers are forced into desperate cost-cutting measures.
Among the prominent stores closing locations in the US are Walmart, Amazon, CVS, Foot Locker and Macy’s.
DailyMail.com has contacted Bed Bath & Beyond for comment.