On Wednesday, the company revealed that it is partnering with Hilco Global to restock its inventory as part of its ongoing efforts to remain operational and avoid bankruptcy, according to a report by CNBC.
ReStore Capital, an investment manager under Hilco, is providing a vendor consignment program to the struggling home goods retailer in an effort to get merchandise back on its shelves and avoid bankruptcy. The program offers "creative financing solutions" to companies in financial distress, the outlet reported.
ReStore Capital, under the agreement, will purchase up to $120 million of prearranged merchandise from Bed Bath's key suppliers on a revolving basis to help replenish inventory levels at Bed Bath's namesake stores and Buybuy Baby, said the outlet, citing conditions of the deal.
Bed Bath has faced challenges in restocking its shelves as its vendors have been tightening their credit terms, cutting limits, and demanding prepayments before fulfilling orders, as the company had previously noted. Despite the obstacles, CEO Sue Gove has emphasized that Bed Bath is committed to overcoming its operational and financial challenges.
“Our new vendor consignment program enables us to increase our inventory position in top items that customers are buying and improve the customer experience. This capital-light solution can allow us to strengthen merchandise availability and better fulfill demand,” Gove said in a news release.
“We are doing what we must to sustain our business immediately and unlock our true value over the long-term – for all stakeholders.”
She mentioned the support the company has been seeing from its top suppliers and added that it demonstrates Bed Bath’s “potential for sustainable improvement.”
“We know the performance and value of our business today is not representative of our full potential,” Gove added, according to CNBC. “Our entire organization is focused on expanding and accelerating improvement.”
Bed Bath has been striving to avoid bankruptcy court as it grapples with a string of disappointing quarters that have left the company in the red and drained its cash flow. In the previous week, the retailer released preliminary results for its fiscal fourth quarter, revealing net sales of around $1.2 billion and a 40 percent to 50 percent decline in comparable store sales. Although Bed Bath said negative operating losses persisted, it also noted that it has not yet depleted its free cash flow, the outlet noted.
"The company reported $2.05 billion in revenue for the fiscal fourth quarter of 2022," CNBC reported.
Bed Bath announced in February that it would conduct a stock offering that was expected to generate over $1 billion in equity, but it ultimately only raised $360 million. On March 30, the company announced another stock offering of $300 million and warned that it would likely need to file for bankruptcy protection if it did not succeed.
Bed Bath specializes in home goods. Founded in 1971, the company has grown to become one of the largest home goods retailers in the world, with over 1,500 stores across North America.
Over the past few years, Bed Bath & Beyond has faced a number of challenges, including increased competition from online retailers, changing consumer preferences, and a lack of focus in its product offerings. As a result, the company has struggled to maintain its market share and has seen a decline in sales.
In response, Bed Bath & Beyond has undertaken a number of initiatives to try and turn the company around. One of these initiatives has been to streamline its product offerings and focus on its core business of home goods. The company has also invested heavily in its online presence, with the aim of competing more effectively with e-commerce giants like Amazon.
In addition, Bed Bath & Beyond has sought to improve its in-store experience by investing in new technology and redesigning its stores to make them more attractive and appealing to customers. The company has also launched new loyalty programs and promotional campaigns to try and drive sales and improve customer engagement.
Still, "the company’s shares have been trading at around 35 cents. Its market value is $151.5 million, as of Tuesday’s close," CNBC reported.
Sources include:
Please contact us for more information.
