Bed Bath & Beyond has been struggling financially for several years, but their position seems to be getting even more precarious. They provided a business update today sharing their performance from Q3 2022 showing that sales dropped by a third and they encountered a loss of $385.8 million.
The business update mentions that part of the reason for the reduced sales was due to lower inventory levels and that’s something my wife can attest to. For the first time in probably a few years, she went to a local Bed Bath & Beyond the other day with a friend and said it was a shame Bed Bath & Beyond was closing down. She was surprised when I said that although they were struggling, they weren’t officially closing down because apparently the store was literally half empty with nothing on the shelves.
Anyway, the business update concludes with the following:
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 continues to consider all strategic alternatives 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. These measures may not be successful.
The reference to possibly filing for bankruptcy isn’t too surprising given their debt levels of more than $1 billion. What caught my eye more was their conclusion that “there is substantial doubt about the Company’s ability to continue as a going concern.”
I therefore wanted to highlight this seeing as Bed Bath & Beyond gift cards are a popular brand for gift card resellers. There’s no knowing how sudden a collapse of Bed Bath & Beyond could be, especially seeing as we don’t know what their sales (and losses) were like in Q4 – a key sales period. If they file for bankruptcy, the value of their gift cards should be fine for as long as they remain in business. However, whether they’ll remain in business for much longer is a whole other matter.
Not at all surprising. They’ve been offering 25% off entire purchase – pretty suspicious.
Btw headline isn’t very clear (at least to me) that their ability to continue is in doubt.
I’ve updated the title to make it a little clearer.
👍
Perhaps “Bed Bath & Bankruptcy”?