Store Closures Ahead for Bed Bath & Beyond
Bed Bath & Beyond appears to have avoided bankruptcy, at least for now, as the struggling retailer has raised more than $1 billion and will shrink its store count with the closure of an additional 150 stores.
The company said it raised the funding through stocks and warrants, with the net proceeds earmarked to repay outstanding debt. Bed Bath & Beyond officials said they expect the company to reborrow loans under its amended credit facility to enable its strategic initiatives in fiscal 2023, which will be further supported by a realigned store footprint and cost structure.
With future store closures in the offing, Bed Bath & Beyond said its ultimate goal is to have 360 stores under the Bed Bath & Beyond banner and approximately 120 buybuy BABY stores across the U.S.
In response to evolving shopping preferences, this target store base includes the company's most profitable locations and best geographic presence for shoppers that can enable an optimal omni-experience. The digital channel is expected to rise to a higher proportion of sales with improved channel profitability.
“This transaction will provide a runway to execute our turnaround plan,” said Sue Gove, president & CEO of Bed Bath & Beyond. “We are optimizing our store fleet and supply chain and continuing to invest in our omni-always capabilities. This will enable us to better serve our customers, and grow profitably, by directing merchandise where and how they want to shop with us.”
Additionally, the company will also be pursuing asset-light inventory management strategies to drive growth, including vendor-direct-to-consumer, marketplace, and the potential for innovative collaborations.
"Our board and management, working closely with advisors, evaluated every strategic alternative available to us to reach the appropriate solution to maximize prospects for all stakeholders in our pursuit of long-term value creation,” Gove said. “We are determined to achieve our goals and we are grateful to our thousands of associates and many partners for their dedication to our beloved brands, Bed Bath & Beyond and buybuy BABY."