Bed Bath & Beyond closes stores and raises $1 billion to stave off bankruptcy
By Jordan Valinsky, CNN
Bed Bath & Beyond is closing 150 more stores — just a week after the struggling retailer announced the closure of 87 locations.
The company’s brick-and-mortar footprint has already shrunk dramatically, a regulatory filing showed late Monday, and the new closings mean it will have shuttered 400 stores in the past year — almost half the 950 or so stores it had open in February 2022.
That includes last week’s announcement that it was also closing all 49 remaining Harmon Face Value stores, which sold cosmetics; plus 5 buybuy Baby locations. A list of the new store closures wasn’t immediately available.
A turnaround doesn’t look imminent: The embattled home goods chain forecasts first quarter sales to be down by 30% to 40% with “sequential, quarterly sales improvement thereafter” the filing said.
The company said Tuesday it raised some $1 billion through an offering of preferred stock and warrants in a last-ditch effort to stave off bankruptcy. On Monday, the company said it appointed Holly Etlin, a bankruptcy expert, as interim chief financial officer.
Bed Bath & Beyond said Tuesday it will ultimately have 360 stores and 120 buybuyBaby stores. That means that the company will have announced plans to close nearly 500 of the stores it had just a year ago, and the new company will be about half of the size of the old one
The chain has said in recent weeks that it had defaulted on a loan and may not be able to remain in business, raising concerns about its future. Bed Bath & Beyond 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% last year when activist investor and GameStop chairman Ryan Cohen took a stake and sought changes.
Shares of the retailer, which closed up 92% at $5.86 in a rollercoaster session Monday, were down 40% in in pre-market trading Tuesday.
Company’s troubles
Founded in 1971, Bed Bath & Beyond became a staple for affordable home decor, kitchenware and college dorm room furniture. It’s also known for its ubiquitous 20% off blue coupons, and cavernous stores with merchandise stacked high to the ceilings.
But the company struggled to make the transition to online shopping and fend off larger chains such as Walmart and Target. Many shoppers switched to those competitors as the novelty of Bed Bath & Beyond’s coupons faded.
The company was also hit hard during the pandemic, closing stores temporarily during 2020 while rivals remained open. The company lost 17% of its sales in 2020 and 14% in 2021.
— CNN’s Nathaniel Meyersohn and Reuters contributed to this report
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