After securing a last-minute equity deal to help avoid near-term bankruptcy, Bed Bath & Beyond said it is focused on improving its financial footing.
In a Feb. 21 filing with the U.S. Securities & Exchange Commission (SEC), the struggling Union-based home goods retailer said that although it missed a Feb. 1 interest payment to bondholders, the company will make good on what it owes by the end of the month.
According to Bed Bath & Beyond, the full amount of interest due to holders of senior notes has been prefunded and will be paid Feb. 28.
The company – which had been in a grace period since missing those payments – said it will be able to pay the interest after it received $24 million as part of its recent equity raise.
After closing an underwritten public offering Feb. 7, Bed Bath & Beyond said it secured $225 million, as well as anticipates an additional $800 million in future installments, which will be used to cover debt payments and continue operations.
However, due to the way the arrangement is structured, calling for a series of multiple tranches, the company recently cautioned it expects to file for bankruptcy if the stock transactions are “not fully consummated.”
In a Feb. 21 statement, Bed Bath & Beyond Chief Executive Officer and President Sue Gove said, “Building on the transformative equity financing we announced earlier this month, we continue to work on improving our financial position and optimizing value for all our stakeholders.”
“Today’s announcement is an important step in resetting our operational and financial foundation and meeting our commitments. We remain focused on utilizing our current and future financing to execute our turnaround plans and restore our position with customers,” Gove said.
Despite introducing a turnaround strategy in August 2022 that called for closing 150 lower-performing stores and laying off 20% of its corporate and supply chain workforce, Bed Bath & Beyond continues to wrestle with mounting debt and losses, prompting the chain to try and conserve cash.
In January, the retailer issued a dire warning, saying that it may resort to filing for bankruptcy protection, but would consider alternatives such as restructuring, refinancing debt, seeking additional debt or equity capital, selling assets or pulling back on other business activities.
Since then, the company announced additional closures – including its entire chain of Harmon locations.
After revealing plans to close 150 more stores, on top of 250 previously announced closures, Bed Bath & Beyond said it ultimately plans to keep 480 locations open — 360 of its namesake brand and 120 Buybuy Baby stores.
The latest round of closings means Bed Bath & Beyond will have shuttered 400 stores in the past year — almost half of the 950 locations that were open in February 2022.
The company is also in the process of shutting down operations in Canada, saying there is not enough capital available to save both its U.S. business and its subsidiary.
After being granted an initial order for credit protection by the Ontario Superior Court of Justice, the Canadian division – which includes 54 Bed Bath & Beyond stores and 11 Buybuy Baby stores – will now commence creditor protection proceedings to allow for a timely wind-down of operations and liquidation of inventory, the order said