The big shopping holidays have come and gone, and as we have settled into a fresh new year, one giant retailer is looking for relief – Bed Bath & Beyond.
As we’ve previously discussed, home wares leader Bed Bath & Beyond has had their share of trouble in recent years. Just last year, we wrote about BB&B shuttering stores, and they publicly shifted blame toward a struggling supply chain.
We couldn’t help but wonder if all of the finger pointing was to deflect attention away from problems with their increasingly flea-market-esque business model.
While online retailers like Amazon have grown exponentially in the home goods space, Bed Bath & Beyond has not changed much. Their prices often seem fair and their products of decent q uality, that is, until you do an internet search for a comparable item.
With inflation soaring and the economy slowing, consumers are actively seeking for the best deals, and this might be a primary area where BB&B stumbles. Last fall, former CFO Gystavo Arnal committed suicide in New York after facing pump and dump allegations. Arnal and others had just been served in a lawsuit for engaging in a fraudulent scheme to artificially inflate the of Bed Bath & Beyond stock.
As it stands, Bed Bath & Beyond expects to net a loss of around $385 million dollars for the third quarter, which is a 40% increase in loss over the year prior.
The company is considering restructuring, selling assets, and seeking additional capital, but filing for bankruptcy is a very real possibility.
Soon, stores will not have the funds to cover daily operations expenses, such as leasing agreements and payments to suppliers. Stocks plummeted by about 30% after BB&B shared the financial update, hitting a 52-week low and closing at just $1.69 on the day.
Some suppliers have taken note of the current financial struggles of Bed Bath & Beyond, refusing to ship out large quantities of merchandise to the company. Even so, CEO Sue Gove remains strangely optimistic, stating that they’ll use holiday season shopping money to pay vendors for additional inventory.
“We have seen trends improve when in-stock levels have increased,” said Gove. “Transforming an organization of our size and scale requires time, and we anticipate that each coming quarter will build on our progress.”