Will Bed Bath & Beyond Go Bankrupt?

By Douglas A. McIntyre Published Jun 8, 7:30AM EDT

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Will Bed Bath & Beyond Go Bankrupt? — © MihaPater / Getty Images

Recently, Loop Capital analyst Anthony Chukumba said that bankruptcy may be the best path out of Bed Bath & Beyond’s trouble. Could this be true? The current retail landscape and the retailer’s atrocious results support the argument. Investors should prepare for getting a tiny return as Bed Bath & Beyond becomes a penny stock or loses share value completely.
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The Motley Fool wrote that it may be “too hard to swim against the tide of worsening economic conditions, a deteriorating financial position, and a management team not up to the task of salvaging the business.”

Bed Bath & Beyond is far smaller than retail giant Target, but it shares some of the same problems. Inventory management in the current environment is extremely difficult. Target’s stock was hit recently as it downgraded its forecast for the second time in a month.
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Retail stocks could be gutted again if the holiday season is weak. The revenue from this period is usually critical to the fortunes of retailers. Consumer confidence in the United States is low, and forecasts of a recession grow by the day. Bed Bath & Beyond’s customers will continue to disappear.

The retailer’s problems are not new. Its stock has underperformed the market for almost all of the past five years. In that time, it is off 76%. The S&P 500 is up 71% over the same period.

Bed Bath & Beyond certainly does not have more time to prove itself than until the end of the year, when holiday results show how difficult the road has been.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.