Bed Bath & Beyond issued a grim message about its future on Thursday, warning that filing for bankruptcy is a possible outcome for the company.
The household goods chain said in a regulatory filing on Thursday that there was “significant doubt about the company’s ability to continue” as its financial situation worsened.
The company is exploring strategic options, including debt restructuring, additional funding, asset sales and bankruptcy filings, he added.
Bed Bath & Beyond (BBY) shares plunged more than 20% in early trading on Thursday. The stock has hit an all-time low of $2.
“Bed, Bath & Beyond has gone too far to be preserved in its current form,” GlobalData Retail analyst Neil Saunders said in a note to clients on Thursday. “All of this indicates that bankruptcy is the most likely outcome.”
The company’s announcement is the latest sign of trouble at one of America’s most popular retailers for decades. Founded in 1971, Bed Bath & Beyond has become a staple of affordable home décor, kitchenware and college dorm room furniture. The retailer has become known for his ubiquitous 20% off blue coupons and cavernous stores with merchandise stacked to the ceiling. The brand desperately wanted it on the shelves of Bed Bath & Beyond.
However, the company struggled to transition to online shopping, unable to fend off larger chains like Walmart (WMT) and Target (TGT). As the novelty of Bed Bath & Beyond’s coupons wore off, many shoppers switched to these competitors. Consumers can find many cheaper alternatives on Amazon (AMZN) and other online sites.
The company was also hit hard during the pandemic, temporarily closing stores in 2020 while its rivals remained open. The company lost his 17% of sales in 2020 and his 14% in 2021.
Bed Bath & Beyond has rotated turnaround strategies with several different executives over the last few years. That includes former Target exec Mark Tritton, who left the company last year after less than three years as CEO.
As of February 2022, Bed Bath & Beyond has 950 stores and 32,000 employees. The company also owns a children’s retail store, buybuy Baby.
The chain announced in August that it would lay off about 20% of its workforce, close about 150 stores, and cut some of its own home goods brands.
Bed Bath & Beyond announced Thursday that net sales in its most recent quarter, including Black Friday, fell 33% from the same period last year to $1.25 billion. That loss is up 40% from a year ago to his $385 million.
On Thursday, CEO Sue Grove urged patience, saying, “We have a clear vision for the company’s future.”
“Transforming an organization of our size and scale will take time, and we expect each quarter to build on our progress,” she said.