Bed Bath & Beyond could be nearing bankruptcy, and analysts predict that the fall could also hurt other retail stores.
- Bed Bath & Beyond says it could be nearing bankruptcy, dropping its stock price by almost 30% to the lowest level in 30 years.
- The company has been facing low customer traffic and inventory and expects to report a net loss of $385.8 million for the quarter.
- If the retail store does file for bankruptcy, many analysts say it could affect other retail chains.
Why it’s news
Bed Bath & Beyond was once the go-to place for home goods but has recently been struggling with a decline in customers and low inventory. The once-booming retail store is now warning that it could be filing for bankruptcy in the future.
The announcement of the possible bankruptcy sent the company’s stock price falling nearly 30%, marking the lowest level since 1993.
The company is attempting to fix its balance sheet as it struggles with financial difficulties.
“The Company continues to consider all strategic alternatives, including restructuring or refinancing its debt, seeking additional debt or equity capital, reducing or delaying the Company’s business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S. Bankruptcy Code,” Bed Bath & Beyond says. “These measures may not be successful.”
Many retail analysts are saying if the company does file for bankruptcy, it could bring short-term financial effects to other big retail chains, including Target and Walmart.
If the company has to file, it will liquidate all of its inventory sending customers to the store for the low prices and taking the money away from other retailers, but it will only be for a short period of time.
Bankruptcy experts believe that the company will have to file for bankruptcy and predict it could be soon, possibly before the end of this month.”I think it’s inevitable that they file,” Macco CEO Drew McManigle said on Yahoo Finance Live. “I wouldn’t be surprised to see them file as early as this weekend. There’s no reason not to. I suspect they’ve been working on their debtor in possession financing.”