Struggling Bed Bath & Beyond warned on Thursday that there’s substantial doubt about the company’s ability to continue as a “going concern” as sales continue to drop and it struggles to attract shoppers.
FILE - Shoppers enter and exit a Bed Bath & Beyond in Schaumburg, Ill., Jan. 14, 2021. Struggling Bed Bath & Beyond warned on Thursday that there's substantial doubt about the company's ability to continue as a"going concern" even as it continues to look at options like refinancing its debt or restructuring its business in bankruptcy court.
The Union, New Jersey-based home goods retailer said that it's looking at several options, including selling assets or restructuring its business in bankruptcy court. But it acknowledged that even those efforts may not be successful.“There is substantial doubt about the company’s ability to continue as a going concern,” the retailer said in a statement.Bed Bath & Beyond said it expects to report net sales of $1.26 billion for the third quarter ended Nov. 26.
Mired in a prolonged sales slump, the company also announced back in August that it would revert to its original strategy of focusing on national brands, instead of pushing its own store labels., who was ousted last June after less than three years at the helm. The company said it would get rid of one-third of its store brands, which had started to be rolled out in the last year or so. Besides Bed Bath & Beyond, the company also runs the buybuy Baby and Harmon chains.
Neil Saunders, managing director of GlobalData Retail, wrote in a report Thursday that Bed Bath & Beyond is “too far gone to be saved in its present form.” He noted that the company could restructure under Chapter 11, but it would still need to come up with a credible plan to reinvent the business, and that is going to be challenging, particularly in a weakening economic environment.
“A catalogue of missteps has run the company into the ground and has made it increasingly irrelevant,” he wrote. “Only very radical action will allow it to survive and even if it does, it will be a shadow of its former self.”
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