A Bed Bath & Bust move could bring short-term financial pain to furniture retailers amid a sell-off across the country, one expert warned.
“In the short term, liquidation [would be] it’s a bit difficult at JC Penney, Kohl’s, Target, Walmart, Wayfair and maybe the Container Store – and in some cases maybe Macy’s – because it’s someone’s favorite. [liquidator] Gordon Brothers is going to run a very aggressive stock market,” said stock market expert Jan Rogers Kniffen at Yahoo Finance.
The odds for Bed Bath & Beyond ( BBBY ) going into 2023 look high.
Bed Bath & Beyond said Thursday that bankruptcy is on the table as it works to improve its balance sheet after a disappointing sales season.
“The Company continues to evaluate all possible options including restructuring or refinancing its debt, seeking additional debt or equity capital, curtailing or postponing the Company’s business and strategic plans, or the sale of assets, other transactions and/or other actions, including obtaining relief under the US Bankruptcy Code,” Bed Bath & Beyond said in a statement.
“These measures may not be successful,” added the company, noting that there is “significant doubt” about its ability to continue as a “going concern.”
For its third quarter ending November 26, 2022, sales fell over 30%, to $1.259 billion from $1.878 billion in the same quarter last year. The company said those numbers reflected “lower customer traffic and lower search availability, among other things.”
Bed Bath & Beyond is expected to report a net loss of $385.8 million for the quarter.
Meanwhile, shares of the retailer fell nearly 30% in Thursday’s session and another 22% on Friday, leaving the stock at levels not seen since 1992. .
Bankruptcy officials do not rule out a filing from Bed Bath & Beyond that happens this month.
“I think it’s inevitable that they will file,” Macco CEO Drew McManigle said on Yahoo Finance Live. “I am not surprised to see their files at the beginning of the weekend, there is no reason not to do it, I guess they are working on their debt in financing.
When asked about the bankruptcy issue, Bed Bath & Beyond spokeswoman Julie Strider told Yahoo Finance: “Since the beginning of the entire plan of Bed Bath & Beyond Inc. in beginning of the third quarter, which includes financial actions to improve our balance and cash flows, we worked with special consultants to evaluate all the ways to regain market share and improve liquidity, our priorities mention. and strategic plans, or the sale of assets, other transactions and/or other processes.
In any case, Kniffen believes, Bed Bath & Beyond’s competitors will quickly bounce back from any public sale.
The reason for that, Kniffen explained, is because Bed Bath & Beyond has been bordering on irrelevant in the minds of consumers for years because of the product’s problems.
“Six months later those same players will see negligible profits,” Kniffen added. “But this company has been giving away market share for twenty years now. I don’t know how there are really winners that deserve to be called out. It just can’t move the needle for anyone. . Some shares will go online on Amazon, too, but also directly.”
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