The Bed Bath & Bust scenario could create short-term financial pain for rival furniture retailers amid aggressive nationwide exit clearance sales, one expert warned.
“In the short term, liquidation [would be] JC Penney, Kohl’s, Target, Walmart, Wayfair, and possibly Container Stores, and to some extent Macy’s are a little tougher. [liquidator] Gordon Brothers will have a very aggressive liquidation sale,” retail expert Jan Rogers Kniffen told Yahoo Finance.
Bed Bath & Beyond (BBBY) is likely to go bankrupt in 2023.
Bed Bus & Beyond said Thursday that bankruptcy is being considered as it seeks to bolster its leaky balance sheet after a disastrous holiday shopping season.
“We may restructure or refinance our debt, pursue additional debt or equity capital, curtail or delay our business operations and strategic initiatives, sell assets, and other strategic transactions and/or other actions, including relief. We will continue to consider all strategic alternatives, including under U.S. bankruptcy law,” Bed Bath & Beyond said in a statement.
“These measures may not be successful,” the company added, noting that there was “considerable doubt” about its ability to continue as a “going concern.”
Revenue for the third quarter of the fiscal year ended November 26, 2022 was $125.9 million, down more than 30% from $1,878 million in the year-ago quarter. The company said these numbers reflect “decreased customer traffic and lower inventory levels, among other factors.”
Bed Bath & Beyond expects to report a net loss of $385.8 million in the quarter.
Meanwhile, retailer stocks fell nearly 30% in Thursday’s session and another 22% on Friday, taking stocks to levels not seen since 1992.
Bankruptcy experts have not ruled out filings from Bed Bath & Beyond this month.
Macco CEO Drew McManigle said on Yahoo Finance Live: “I wouldn’t be surprised to see them file their files this weekend. There’s no reason not to. I think they’re working on financing the debtors they own.
When asked about the bankruptcy issue, Bed Bath & Beyond spokesperson Julie Strider told Yahoo Finance: We have worked with strategic advisors to evaluate all paths to regain market share and increase liquidity.These paths include restructuring or refinancing debt, seeking additional debt or equity, strategic initiatives, or the sale of assets, other strategic transactions and/or other means. No decision has been made at this time.
Either way, Kniffen ultimately believes that Bed Bath & Beyond’s competitors will soon be back on their feet from widespread out-of-business sales.
The reason, according to Kniffen, is that Bed Bath & Beyond remained irrelevant in shoppers’ heads for years due to product execution issues.
“Six months from now, the same players will see a slight market share gain,” Kniffen added. I don’t think there is an actual winner worthy of a shout out.No one can move the needle.Some shares are even sent online to Amazon.Of course.”
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