Bed Bath & Beyond Will Be Out of Business

By Douglas A. McIntyre Published Mar 31, 10:30AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Bed Bath & Beyond Will Be Out of Business — © Bruce Bennett / Getty Images News via Getty Images

Call it an opinion, or a judgment call. Bed Bath & Beyond Inc. (NASDAQ: BBBY) will be out of business soon. It is low on cash, its sales have cratered and its last real chance to get financing has ended. (Here are 25 brands that customers have abandoned.)
[in-text-ad]
According to The Wall Street Journal, “Bed Bath & Beyond Inc. said it will try to sell up to $300 million of common stock in the open market while terminating a fundraising deal with hedge fund Hudson Bay Capital Management LP.” The deal was somewhat dependent on Bed Bath & Beyond’s revenue being above a specific level. It has dropped well below that.
[nativounit]
So, Bed Bath & Beyond can go to the equities markets, where investors already face a bankruptcy that could drop the value of the stock to zero. With its stock at $0.57 and a market cap of $69 million, the chance it can raise $300 million borders on impossible. It could easily drive the stock price to below $0.20.

Bed Bath & Beyond has been on deathwatch for more than a year. Quarter over quarter, revenue and same-store sales have dropped by over 20%. It has drawn down cash at a frightening pace, and it has closed stores and cut people.

Bed Bath & Beyond also had an inventory problem, particularly during the critical holiday period. Suppliers either had not been paid or were worried they would not be.
[wallst_email_signup]
The company’s collapse is as ugly as those of J.C. Penney, Sears and Kmart. Each was in limbo for months, and sometimes years, as management frantically tried to bring in new customers, who eventually began to go elsewhere.
[recirclink id=1215262]
It would be easy to blame the Bed Bath & Beyond implosion on Walmart or Amazon, which have played a role in the demise of other retailers. That would be too simple. Bed Bath & Beyond turned out to be its own worst enemy. It made mistakes with inventory selection and with its choices of management.

Now, it is too late to fix any of those mistakes, and Bed Bath & Beyond is on its way to the retail graveyard. There it faces the need to fire all its employees and go through a liquidation.

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.