The Bed Bath & Beyond saga continued today after the company issued its planned investor update and filed form S-3 with the Securities & Exchange Commission (SEC) for a “shelf offering.” 📰
First, let’s start with the company’s update. The struggling retail outlined additional measures to turn around its operations, including:
- Closing 150 of its weaker namesake stores
- Shrinking headcount by 20% across its corporate and supply chain workforce
- Eliminating the jobs of Chief Operating Officer and Chief Store Officer
- Securing over $500 million in new financing
- Walking back its push into private-label brands, opting to partner with national brands on exclusive products and adding more direct-to-consumer brands
If this looks like a massive overhaul, it is. The company’s same-store sales in Q1 were down 23%, its suppliers threatened to stop making deliveries, and its financial picture remains shaky. 😨
In other words, they need to do something…and fast.
In addition to its investor update, the company filed a “shelf offering” with the SEC, allowing it to periodically sell securities to raise more cash. It did not disclose a specific amount it intends to sell but said any money raised is for “general corporate purposes.” 💰
Much like its customers, the market isn’t buying the company’s turnaround story yet. Shares were down 21% and are about 70% below their high from just two weeks ago. 🔻
Many traders are abandoning the meme stock due to its lost upward momentum. Meanwhile, longer-term investors may be realizing that this turnaround story may take a bit longer than anticipated. Others are sticking with it, hoping that its turnaround will be successful, not JCPenney 2.0. 🤷♂️
We’ll have to wait and see who is correct, but for now, let the volatility continue. 🍿