Bed Bath & Beyond preparing to seek bankruptcy protection in coming weeks, sources say
Global News
The retailer is considering skipping debt payments due Feb. 1, one of the sources said, a typical move distressed companies on the verge of bankruptcy take to conserve cash.
Bed Bath & Beyond Inc is preparing to seek bankruptcy protection in coming weeks, people familiar with the matter said, following poor sales and an inability to compete with large online and big-box retailers.
The U.S. home goods retailer is considering skipping debt payments due Feb. 1, one of the sources said, a typical move distressed companies on the verge of bankruptcy take to conserve cash.
Shares of the retailer, once a category killer in products like small appliances and bed sheets, ended down 30 per cent on Thursday at $1.69 after the company said it expected to report a significant third-quarter loss and that there was substantial doubt about its ability to continue as a going concern.
The company said it was exploring a range of options to address its plunging sales that included declaring bankruptcy. The retailer said it has not made any final decisions on which course to take.
Bed Bath & Beyond had no immediate comment on any bankruptcy preparations beyond its disclosure on Thursday.
The company has interest payments on roughly $1.5 billion of bonds due Feb. 1, according to securities filings.
The company is considering skipping the payout to conserve cash, which would likely trigger a 30-day grace period before the company officially defaults, the people said.
Troubled retailers often seek bankruptcy protection following the holiday season to take advantage of the cashcushion provided by recent sales. Should the company seek bankruptcy protection, it would likely seek financing from existing creditors to help it navigate a court restructuring, one of the people said.
