Bed Bath & Beyond issued a grim message about its future Thursday, warning that a bankruptcy filing is a possible outcome for the company.
There is “substantial doubt about the company’s ability to continue” because of its worsening financial situation, the home goods chain said in a regulatory filing.
The company added that it is exploring strategic alternatives, including restructuring its debt, seeking additional cash, selling assets and filing for bankruptcy.
The Wall Street Journal reported that Bed Bath & Beyond is preparing to file for bankruptcy within weeks, citing sources familiar with the matter. Bed Bath & Beyond did not immediately respond to request for comment from CNN.
Bed Bath & Beyond’s (BBY) stock plunged nearly 30% Thursday. It dipped below $2 a share, an all-time low.
“Bed Bath & Beyond is too far gone to be saved in its present form,” Neil Saunders, an analyst at GlobalData Retail, said in a note to clients Thursday. “All of these points to bankruptcy as being the most likely outcome.”
The company’s announcement marked the latest sign of trouble at one of the most popular retailers in America for decades. Founded in 1971, Bed Bath & Beyond became a staple for affordable home decor, kitchenware and college dorm room furniture. The retailer became known for its ubiquitous 20% off blue coupons and cavernous stores with merchandise stacked high to the ceilings. Brands coveted a spot on Bed Bath & Beyond shelves.
But the company struggled to make the transition to online shopping and fend off larger chains such as Walmart (WMT) and Target (TGT). Many shoppers switched to those competitors as the novelty of Bed Bath & Beyond’s coupons faded – consumers can find plenty of cheaper alternatives on Amazon (AMZN) and other online sites.
The company also was hit hard during the pandemic, closing stores temporarily during 2020 while rivals remained open. The company lost 17% of its sales in 2020 and 14% in 2021.
Bed Bath & Beyond has rotated through several different executives and turnaround strategies in recent years, including former Target executive Mark Tritton, who left the company last year after less than three years as CEO.
As of February 2022, Bed Bath & Beyond had 950 stores and 32,000 workers. The company also owns chidren’s retailer buybuy Baby.
The chain said in August that it will lay off approximately 20% of corporate employees, close around 150 stores and slash several of its in-house home goods’ brands.
Bed Bath & Beyond said Thursday that net sales for the company’s latest quarter, which included Black Friday, dropped 33% to $1.25 billion from the same time a year ago. Its losses grew 40% to $385 million from a year ago.
On Thursday, CEO Sue Grove said “we have a clear vision for the future of the company” and asked for patience.
“Transforming an organization of our size and scale requires time, and we anticipate that each coming quarter will build on our progress,” she said.