Bed Bath & Beyond has warned it will likely go bankrupt if its last-ditch $300 million equity offering announced on Thursday fails.
"We expect that we will likely file for bankruptcy protection if we do not receive the proceeds from the offering of securities covered by this prospectus supplement,” the company said.
The troubled home goods retailer on Thursday filed to sell new shares to repay its creditors and enable its strategic initiatives for fiscal 2023, including investing in merchandise inventory, which will be further supported by a realigned store footprint and cost structure.
"The actions we've taken have enabled us to create the necessary financial runway to begin restoring our iconic Bed Bath & Beyond and buybuy BABY businesses,” commented Bed Bath & Beyond CEO Sue Gove.
“We have raised $360 million of equity capital since the beginning of February, cured our default under our credit agreement, repaid material amounts of our ABL facility, completed our interest payment for our Senior Notes, all while jumpstarting our turnaround plans."
Investors, however, do not seem to be convinced the brand can stage a successful turnaround.
Bed Bath & Beyond stock tumbled a further 28.5% to a new record low of $0.42 on Friday afternoon, after falling 26% to $0.59 at Thursday’s close.
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie