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BFD Expert Voices - Retail Deals

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Facing imminent bankruptcy, Bed Bath & Beyond has two last-gasp efforts ongoing.

Driving the news: The beleaguered home goods purveyor is reported to be preparing to file for bankruptcy within days, according to the Wall Street Journal.

Details: The two time-sensitive efforts include a plan to raise $300 million by selling shares and a reverse stock split.

What's happening: The company has cited April 26 as the deadline by which it needs to raise the cash in order to avoid bankruptcy.

It's also the date when it is expected to file its 10-K.

As of April 10, the company had raised $48.5 million, per the WSJ.

At that time, it had 178 million shares to sell, which would net the retail roughly $70 million to $80 million given its stock price, also per the report.

Meanwhile, BBBY also set May 9 as the date for a shareholder vote on a reverse stock split.

What they're saying: Late April was seen as the time period BBBY was likely to file for bankruptcy because of what the company was communicating publicly, says Fitch Ratings senior director David Silverman.

While it's the date when the company is expected to file its 10-K, it's unclear why it set the deadline for April 26, he tells Axios.

The reverse stock split will have no impact on its ability to avoid bankruptcy, Silverman notes.

Be smart: Most companies would want to declare bankruptcy with a go-forward plan in place that would include interim financing, he says.

Reality check: Companies that declare bankruptcy aim to be cash generative, by shedding debt and lowering interest payments, but BBBY does not seem to be in that position, Silverman says.

What's next: The next question to be asking is what does bankruptcy look like and when does BBBY emerge, he says.

The more time that passes without a financing solution, the chance of liquidation increases.

The bottom line: While it has generated a bit of capital here and there, it has not raised the funding it needs to remain a going concern and the business continues to get worse, Silverman says.

Bed Bath & Beyond did not respond to a request for comment.

Bed Bath & Beyond's time is running out

The home goods retailer is attempting to raise $300 million by April 26.

Illustration of an hourglass with money pouring through, top half is almost empty.

Bankruptcy

Facing imminent bankruptcy, <a class="gtmContentClick" data-vars-link-text="Bed Bath &amp; Beyond" data-vars-click-url="https://www.axios.com/2023/02/07/bed-bath-beyond-offering-proceeds-1-bilion" data-vars-content-id="32a90a38-11fa-4971-923a-27db298fcf70" data-vars-headline="Bed Bath &amp; Beyond&#x27;s time is running out" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/02/07/bed-bath-beyond-offering-proceeds-1-bilion" target="_self">Bed Bath &amp; Beyond</a> has two last-gasp efforts ongoing.Driving the news: The beleaguered home goods purveyor <a class="gtmContentClick" data-vars-link-text="is reported to be preparing to file for bankruptcy" data-vars-click-url="https://www.wsj.com/articles/bed-bath-beyond-preparing-for-bankruptcy-filing-within-days-7d5840a7?st=do6rm1yvrqsu81p&amp;reflink=article_copyURL_share" data-vars-content-id="32a90a38-11fa-4971-923a-27db298fcf70" data-vars-headline="Bed Bath &amp; Beyond&#x27;s time is running out" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.wsj.com/articles/bed-bath-beyond-preparing-for-bankruptcy-filing-within-days-7d5840a7?st=do6rm1yvrqsu81p&amp;reflink=article_copyURL_share" target="_blank">is reported to be preparing to file for bankruptcy</a> within days, according to the Wall Street Journal.

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Bed Bath & Beyond's time is running out

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