After months (well, years) of attempting to right the ship, Bed Bath & Beyond has finally called it quits. 👎
The struggling retailer was trying to make it until May to hold a special shareholder vote, where it was proposing a reverse split. Executives hoped a higher share price could broaden its investor base and give it more room to raise additional equity capital. 🖖
However, it filed for Chapter 11 bankruptcy protection this weekend as it could not secure enough money to continue operating. The concept isn’t surprising to investors, as the company issued a “going concern” notice following its rough holiday season, but the timing is. Many hoped its recent financing arrangements could extend its life enough to approve the reverse split.
Instead, Bed Bath & Beyond is entering liquidation mode. It has secured $240 million in debtor-in-possession financing from Sixth Street to continue operating through the bankruptcy process. As for who is steering the ship, longtime retail turnaround expert Holly Etlin has that job. She’s been appointed as chief financial officer and chief restructuring officer. 👩💼
The company’s 360 namesake stores and 120 Buybuy Baby locations will remain open during the liquidation. And it’s currently commissioning the bankruptcy court for permission to auction off those brand names. However, it’s already committed to closing its Harmon FaceValue stores. 🏬
As for the stock, $BBBY shares tumbled to fresh all-time lows. 📉
While there was once hope the company could restructure, the liquidation process essentially turns the situation into a math equation for common shareholders. How much, if anything, will be left for them after all the company’s other creditors have been paid? That’s the big question. 🧮
For now, volatility will likely continue as longer-term holders determine what to do with their remaining shares (or profitable short positions) and traders capitalize on the record trading volumes.
As for customers, NBC News broke down what they can expect as it winds down operations. 📝