Bed Bath & Beyond said Wednesday that it secured more than $500 million in new financing and that it is closing stores and laying off staff as it seeks to fix its struggling business.
The moves were part of a wave of changes the home goods retailer announced ahead of an investor update early Wednesday.
As part of its turnaround push, Bed Bath said it will close about 150 of its “lower producing” namesake stores and reduce its workforce by about 20% across its corporate and supply chain staff. The company said slowing sales have carried into the current fiscal quarter, with same-store sales down 26% so far in the period — a steeper drop that it has seen in years.
To win back customers, Bed Bath said it will bring back popular national brands to its shelves as part of a merchandise overhaul. Interim CEO Sue Gove said all of the efforts are aimed at regaining the company’s “dominance as a preferred shopping destination.”
“We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns,” she said in a news release.
The company said that it has gotten a $375 million loan through Sixth Street Partners, a lender that has provided financing to other retailers including J.C. Penney and Designer Brands. It has expanded $1.13 billion asset-backed revolving credit facility, too.
Earlier Wednesday, it said in a filing that it will sell an undisclosed amount of shares. The retailer’s stock was down 26% in premarket trading.
Bed Bath also announced more leadership changes Wednesday, including the departure of Chief Operating Officer John Hartmann. It said that role and the chief stores officer role have been eliminated. Its board ousted former CEO Mark Tritton and Chief Merchandising Officer Joe Hartsig in late June.
The company’s finances and its business are in a challenging spot. As the retailer has spent money on store remodels, new private brands and stock buybacks, its sales have slowed and its excess inventory racked up. Its net losses widened to $357.7 million in the most recent quarter. As of the end of May, it had about $100 million cash compared with $1.1 billion a year earlier.
That precarious position has endangered relationship with suppliers that it counts on to stock shelves and warehouses with goods — especially during important seasons like back-to-college and the Christmas season.
As part of its merchandise overhaul, Bed Bath is dropping some of its nine private labels. It said it will discontinue three of the exclusive brands: Haven, Wild Sage and Studio 3B. It will significantly reduce the inventory of the others.
Bed Bath’s shares have been on a meme stock-fueled rollercoaster ride for months, rocketing up to $30.06 and falling to a low of $4.38 in the past year. As of Tuesday’s close, shares are down about 17% year to date. Shares closed Tuesday at $12.11, down about 9%.
Read the company’s news release here.