Retail store Bed Bath & Beyond recently announced that it is on track to close around 150 stores by the end of its fiscal 2022 year. The home goods department store is continuing efforts to lift its struggling business.
CEO Sue Gove told analysts in August 2022 during an earnings call that the store closures, “will further enable us to allocate resources according to customer demand.”
The company’s quarterly performance saw sales fall 33% during the three-month period ending in November. Sales at newer stores, that have been open for at least one year, saw a similar picture with a sales decline of 32%.
Fox Business reported on the matter:
“The company said Tuesday that it initiated incremental cost reductions of approximately $80 million to $100 million, which included overhead expenses and headcount. The company said it also recognized another savings opportunity of $80 million to $100 million across the supply chain. “
Bed Bath & Beyond endured losses of $393 million, or $4.33 per share during that quarter. These losses have increased from $276.4 million, or $2.78 per share from a year earlier. The CEO blamed the quarterly performance on inventory constraints and reduced credit limits that have caused a shortage of products on store shelves. The company even questioned whether it can continue operating under current conditions and have considered filing for bankruptcy.
Bed Bath & Beyond stated in a public filing to the SEC:
The Company expects to report net loss of approximately $385.8 million for the three months ended November 26, 2022 compared to net loss of $276.4 million for the three months ended November 27, 2021. The expected net loss for the quarter ended November 26, 2022 includes approximately $100.0 million of impairment charges which are subject to further review and potential adjustment.
While the Company continues to pursue actions and steps to improve its cash position and mitigate any potential liquidity shortfall, based on recurring losses and negative cash flow from operations for the nine months ended November 26, 2022 as well as current cash and liquidity projections, the Company has concluded that there is substantial doubt about the Company’s ability to continue as a going concern.
The Company continues to consider all strategic alternatives including restructuring or refinancing its debt, seeking additional debt or equity capital, reducing or delaying the Company’s business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code. These measures may not be successful.
Bed Bath & Beyond made headlines in the last couple years for discontinuing its sale of MyPillow products. MyPillow CEO Mike Lindell claimed it was due to anti-Trump pressure the retailer was receiving.
A Bed Bath & Beyond spokesperson said in a statement emailed to Yahoo Finance:
“As previously announced, we have been rationalizing our assortment to discontinue a number of underperforming items and brands. This includes the MyPillow product line. Our decisions are data-driven, customer-inspired and are delivering substantial growth in our key destination categories.”
While Bed Bath & Beyond claims the discontinuation was purely for nonpolitical, business drive reasons, Lindell maintains that he was cancelled because of his ties to former President Donald Trump.
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