Bed Bath & Beyond has today announced store closures, job cuts and plans to raise money through a stock offering as the cash-strapped home goods retailer looks to turn around its business.
Shares of the company tumbled 25% in premarket trading as the retailer also forecast a bigger-than-expected 26% slump in same-store sales.
The company said it will close 150 stores, ditch three of its nine owned brands and reduce stocks in the remaining six labels in a reversal of its strategy to focus on private labels.
It also shelved a plan to sell Buybuy Baby, its infant and toddler merchandise business and decided to cut about 20% of its corporate and supply chain workforce.
The US company has about 32,000 employees.
The retailer said it has secured more than $500m in new financing, including a new $375m "first-in-last-out" loan, and would launch a stock offering of up to 12 million shares.
"They are running out of cash and desperately need to raise cash just to keep the business going," said Jim Dixon, equity sales trader at Mirabaud.
The retailer had a long-term debt of $1.38 billion and only $107.5m in cash as of the end of May.
The company also said it was eliminating its chief operating officer and chief stores officer roles.
