Bed Bath and Beyond said that on Wednesday, it will discuss its new strategy with investors.
As it gets ready for the Christmas season, the struggling home goods firm is dealing with sluggish sales and decreasing funds.
According to reports, the business is in discussions with a lender to strengthen its finances and inspire trust in the suppliers that help fill its shelves.
As it burns through cash and seeks to win back consumers in time for the holiday shopping season, Bed Bath & Beyond announced on Thursday that it will shortly unveil its turnaround strategy.
According to a news release, the retailer of home products will provide an investor update on Wednesday morning. Thursday after-hours trading saw a greater than 5% increase in shares.
The company’s call would provide “a preview of strategies and initiatives being implemented throughout the organisation to generate benefits for all stakeholders,” interim CEO Sue Gove stated in the statement.
“We understand the significant interest in our firm and our objectives to improve customer service, reclaim market share, propel development and profitability, guarantee the support of our vendors, and strengthen our balance sheet,” she continued.
Bed Bath & Beyond has to increase sales and persuade investors that business has a future. After its board forced Mark Tritton out earlier this summer, it is searching for a new CEO. As it reduced its 20% discounts and created new private brands, it lost market share to rivals. And when activist investor Ryan Cohen sold out his entire interest in the firm last week, its shares have fallen precipitously.
Additionally, the home goods industry is struggling after a time of abnormally high demand during the pandemic’s height. Additionally, because consumers are spending more on food and other needs as a result of inflation, this discretionary category is more vulnerable. Many blenders, toaster ovens, and coffee makers are being marked down significantly at big-box and specialised retailers equally as a result of those cooling deals.
In June, Bed Bath reported that its first-quarter net sales were down 25% from the prior year, translating into a $358 million net loss. While it did not provide a projection at the time, it did state that it anticipated a recovery in sales in the second half of the fiscal year.
According to managing director of GlobalData Retail Neil Saunders, Bed Bath’s problems are made worse by the current economic climate.
“If you are rushing up a down escalator, you are sprinting up the down escalator that is on superspeed, internally, with the exterior world,” he stated. “This is not the finest climate in which to be attempting to reinvent your firm,” the speaker said. “It’s a tremendously tough, if not impossible, undertaking.”
It is apparently looking to lenders for a lifeline. The firm is close to arranging a $400 million loan to provide it with funds to pay the bills and establish confidence with suppliers, according to a report by The Wall Street Journal. The report quotes persons with knowledge of the situation. According to the Journal, the business is wrapping up talks with Sixth Street Partners, which has provided money to other struggling stores including J.C. Penney.
Along with the dismissal of its CEO, Bed Bath has undertaken additional adjustments. Along with Tritton, the business has parted ways with former merchandising head Joe Hartsig, one of the designers of its private label strategy. A new chief accounting officer has been hired. It introduced a new reward programme and got rid of Wild Sage, at least one of its proprietary brands.
Shares are down nearly 31% for the year as of Thursday’s closing. On Thursday, shares decreased by around 2.5% to settle at $10.10. The market value of the business is $807.6 million.