Homegoods retailer Bed Bath & Beyond is considering bankruptcy saying there is “substantial doubt” the company can survive.
The company issued its dire prediction as it released estimated fall financial results. It has already closed hundreds of stores in recent years.
“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 said.
Bed Bath & Beyond said that it is looking into “all strategic alternatives” to avoid going into bankruptcy, 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.”
However, the retailer noted that such measures may not be successful.
Shares of the company plummeted by 17 percent in premarket trading and are down 29.88 percent as of early Friday morning.
Lack of inventory and customers
Bed Bath & Beyond said on Thursday that it anticipates a third-quarter loss of $385.5 million after sales declined 33 percent, which it said was in part owing to lower customer traffic and reduced levels of inventory availability.
Many of those customers may be Republicans, stated some observers, who reduced their shopping at the store. Bed Bath & Beyond was one of several retailers who abruptly removed MyPillow products because of Mike Lindell‘s support for former President Donald Trump. They also came under scrutiny for how they handled the brand of Ivanka Trump home goods line.
The company expects to report net sales of approximately $1.259 billion for the third quarter of fiscal 2022, down from $1.878 billion a year ago.
The company has had a tumultuous year besides finances and is currently looking for a chief financial officer after executive Gustavo Arnal in September became the latest corporate officer across the nation to kill himself.
–wire services