“We also expect the sale to enable strategic initiatives in fiscal 2023,” CEO Sue Gove wrote in a memo to suppliers on Tuesday, available to Reuters. This could provide the resources and time needed for the turnaround. She asked the suppliers for support. The company may receive an additional $800 million over the next 10 months, Bed Bath & Beyond said. The main investor in the initial offering is Hudson Bay Capital, two people familiar with the matter told Reuters ahead of the sale of the block of shares.
Bed Bath & Beyond initially did not comment on the memo or Hudson Bay’s role. Hudson Bay did not initially respond to a request. The Bloomberg agency first reported on the development with Hudson Bay Capital.
The day before it had become known that Bed Bath & Beyond wants to collect a total of one billion dollars with an offer of preferred shares and warrants in order to avoid bankruptcy. According to analysts, the household goods chain only has a few quarters to revive its business with the fresh money – and the weakening US economy reduces the chance of a turnaround. The offering “may be a band-aid, but I’m not sure what the company’s bottom line is,” said Robert Gilliland, managing director at Concenture Wealth. “The problem is that there probably won’t be a big turnaround story.”
Bed Bath & Beyond’s suppliers are also concerned as the company has delayed or stopped payments altogether, two suppliers told Reuters. “Everything is on hold,” said a children’s clothing manufacturer. He has not delivered any products since the beginning of January. A maker of personal care products said payments are “massively delayed.” The group initially did not respond to a request for these statements.
Bed Bath & Beyond shares temporarily fell 11.96 percent to $ 2.65 in NASDAQ trading.
(Reuters)
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