GET WOKE GO BROKE: Home-goods giant Bed Bath & Beyond considers filing for bankruptcy
Home-goods giant Bed Bath & Beyond announced Thursday, Jan. 5, it may need to file for bankruptcy
. The domestic merchandise company released a statement saying it has "substantial doubt" about its ability to continue
"For the third quarter of fiscal 2022, the Company expects to report net sales of approximately $1.259 billion compared to $1.878 billion in the year-ago period, reflecting lower customer traffic and reduced levels of inventory availability, among other factors," the statement included.
Sue Gove, president and CEO of Bed Bath & Beyond, said the firm is considering all "strategic alternatives," including restructuring and refinancing its debt, seeking additional debt or equity capital, reducing or delaying the company's business activities and strategic initiatives, selling assets and filing for bankruptcy.
"We have a clear vision for the future of the company. Today's announcement underscores the importance of having initiated a turnaround at the start of the third quarter and why we strengthened our leadership team to execute each step with precision," Gove said in the statement.
But despite more productive merchandise plans and improved execution, she said the financial performance was negatively impacted by inventory constraints as they partnered with suppliers to navigate both micro- and macro-economic challenges.
"We continue to manage our financial position amidst a changing landscape and work with expert advisors as we consider all paths and strategic alternatives to accomplish our short- and long-term goals. We look forward to providing an update on these fronts on our formal third quarter earnings call next week," Gove said.
The retail giant already shut down 37 stores in New York, California, Florida, Alabama, Arizona, Georgia, Idaho, Missouri, Mississippi, Montana, Michigan, New Jersey and Minnesota. Bed Bath & Beyond already has a plan in place to close 200 stores over two years, remodel 450 locations and focus more on e-commerce.
Bed Bath & Beyond stock swinging wildly since start of pandemic
The Wuhan coronavirus (COVID-19) pandemic has driven much of consumers into online shopping due to public health mandates.
Bed Bath & Beyond struggled to build a strong digital presence and become one of the worst-hit physical stores during the pandemic. But its shares began surging when retail traders plowed into heavily shorted stocks. The frenzy cooled off when stores reopened following the lifting of COVID-19 restrictions.
Activist investor Ryan Cohen of Chewy and GameStop fame sparked another rally when he bought around 10 percent
stake in the company in March last year. This prompted Cohen's followers on Reddit and YouTube to pump up Bed Bath and Beyond's stock.
But he suddenly sold his entire stake
in August, and the stock fell 52 percent in a two-day wipeout. (Related: SHOP Bed Bath & Beyond bet on China and lost: After kicking Mike Lindell's MyPillow to the curb, chain losing money and closing stores
"Sometimes when things seem too easy, and you see a 100 percent rally for no apparent reason, that's not a sign to get in. That's a sign to get out," said Greg Taylor, chief investment officer at Purpose Investments. "That's what the lesson should be to anyone to get out of this."
In September, the company fired a fifth of its corporate and logistics staff. Suppliers began hesitating about sending more stuff to Bed Bath, worried they won't get paid. In late summer, the company had secured financing that propelled it through the holiday shopping season. Now the retailer is trying to refinance its debts, facing waning enthusiasm from creditors.
Browse through Collapse.news
for updates on companies filing for insolvency due to the failing U.S. economy.
Watch the video below that talks about Bed Bath & Beyond CFO jumping to death after stock fraud allegations
This video is from the NewsClips channel on Brighteon.com
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