Bed Bath & Beyond says it will likely file for bankruptcy if it can’t sell $300 million in stock
By Nathaniel Meyersohn, CNN
Bed Bath & Beyond will sell up to $300 million of its stock to repay creditors and fund its business as it struggles to avoid bankruptcy.
If it’s not able to raise sufficient money from the offering, the home furnishings giant said Thursday it expects to “likely file for bankruptcy.”
Bed Bath & Beyond was able to initially avoid bankruptcy in February by completing a complex stock offering that gave it both an immediate injection of cash and a pledge for more funding in the future to pay down its debt. That offering was backed by private equity group Hudson Bay Capital.
But on Thursday, Bed Bath & Beyond said it was terminating the deal with Hudson Bay Capital for future funding and is turning to the public market.
Success there would give the company time to pursue a turnaround without a bankruptcy filing, which can be costly, out of its control and wind up in a liquidation.
Meanwhile, the company is shrinking to save money. It plans to close around 400 of its roughly 760 Bed Bath & Beyond stores — but will keep open profitable stores in key markets.
The company also gave preliminary fourth quarter earnings Thursday and said sales dropped between 40% to 50% during the quarter from a year ago.
Shares of Bed Bath & Beyond dropped 23% Thursday. The stock was trading around 60 cents a share.
The-CNN-Wire
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