Bed Bath & Beyond Resorts To Act Of Desperation To Avoid Bankruptcy
In one final effort to save the company, Bed Bath & Beyond is attempting to raise $1 billion in stocks and bonds.
Retail chain store, Bed Bath & Beyond is trying to save its business after reports state they are heading for bankruptcy. To prevent its business from failing, it is offering stock and warrants so that it can raise $1 billion. If this plan fails, then bankruptcy is the only next step for the retail company.
In recent weeks, the company has defaulted on a loan which has increased its debt and raised concerns about its future. In a lifeline, Bed Bath & Beyond has held talks with an investment firm willing to write off a significant portion of the debt the company has accrued over the last few years. Due to all this uncertainty, their stock has dropped by a third in the last week.
Bed, Bath, and Beyond are planning to sell their preferred stock and warrants to raise the capital they need to survive. If this succeeds, they will receive a waiver on their recent defaulted loan.
From the stocks and warrants sold, they would use this new capital to repay any outstanding loans or debt. They also have various other financial plans to secure them more capital in the long run.
It seems like the only interested party is the Californian bank B. Riley Securities. From this deal, they can earn up to $10 million. To get them through this challenging time, Bed Bath & Beyond has appointed an interim chief financial officer, who is an expert in the bankruptcy process, Holly Etlin.
Bed Bath & Beyond vastly increased in popularity in the 1990ss, but since the age of internet shopping, it could not find its niche, unlike its rivals, Walmart and Target. But it wasn’t until January that they have finally shown just how bad their financial situation was as they announced the closure of 150 stores and numerous job cuts.
This week, the retail store is closing another 150 stores nationwide, bringing their total up to 400 store closures. Since their efforts to find a buyer were in vain, the company took a leaf out of Hertz’s books. When Hertz filed for bankruptcy, they attempted to sell new shares to raise capital quickly to stay afloat.
Bed Bath & Beyond is in a similar situation. They are trying to get themselves out of a hole quickly by selling their stock off. But like Hertz, the US Securities and Exchange Commission will be regulating the sales of this stock to ensure everything is above board.
It is reported that Bed Bath & Beyond has liquidators lined up to close more stores if a last-minute buyer does not come to the table.
Bed Bath & Beyond is a retail company that has completely lost its way in an e-commerce society. Even if they do find a buyer, a whole re-structure of not only the company but its products and branding is needed in order to make it a successful and profitable company once again. It is something that is no mean feat. But hopefully, the knight in shining armor that they are looking for will come and rescue them from closure.
