Bed Bath & Beyond Is Going Out Of Business, Bankruptcy Imminent
Bed Bath & Beyond's current financial predicament has analysts predicting that the retailer's only option at this point is to file for bankruptcy.
Many retailers hit hard by the pandemic, and subsequent sky-high inflation, hope to turn things around in the coming year. However, that optimistic view is not in the cards for Bed Bath & Beyond. And news reports suggest the struggling retailer is heading straight for bankruptcy.
The home goods store was founded in 1971 and has been a long-time favorite of shoppers looking for a good deal. Loyal customers loved getting the 20 percent off coupons, going back again and again. But in recent years, the company has failed to overcome roadblocks and fumbled the shift to online shopping.
Then, in 2020, Bed Bath & Beyond leadership decided to close down stores at the height of the pandemic. That disastrous decision resulted in a 17 percent decline in sales. And unfortunately, even news that it finally reopened its doors didn’t help.
Customers had already found alternative sources for their home goods needs, including Target, Walmart, and Amazon. The one-time retail giant couldn’t recover. It lost an additional 14 percent in sales in 2021.
Additionally, company leadership never stuck around long. Bed Bath & Beyond cycled through numerous CEOs recently. And some of the decisions made by these short-term leaders ended up costing the company even more.
In the summer of 2022, Bed Bath & Beyond made news headlines for its decision to turn off the AC in stores. They did so just to save a few bucks. But the backlash was immediate, and they soon changed their tune.
By August 2022, the company started to make drastic changes. According to CNN, “The chain said in August that it will lay off approximately 20% of corporate employees, close around 150 stores and slash several of its in-house home goods’ brands.” Earlier in the year, there were 32,000 employees and 950 stores.
Unfortunately, that wasn’t enough to turn the tide. Bed Bath & Beyond released its latest quarterly numbers on Thursday. And the numbers are sobering.
That quarter included the infamous Black Friday. While the massive shopping day usually boosts sales for retailers, it didn’t for Bed Bath & Beyond. Its net sales were only $1.25 billion, a 33 percent decline from the previous year.
However, that wasn’t the only bad news. The company’s losses also grew. That number was $385 million, a 40 percent increase.
And on Thursday, the stock market reflected the loss of faith from investors. Company stock plummeted by 20 percent, ending the day at under $2 per share. Things are so bad that company leadership submitted a regulatory filing that, “There is ‘substantial doubt about the company’s ability to continue’ because of its worsening financial situation.”
Despite that ominous warning, CEO Sue Grove insists the leadership team has a plan. She believes that she can turn the company around. However, she cautioned it will take some time.
However, some analysts don’t agree with her optimism. An analyst with GlobalData Retail, Neil Saunders, said, “Bed Bath & Beyond is too far gone to be saved in its present form.” He believes that the only option left is bankruptcy.
