As bad as things look in its stores right now, Bed Bath & Beyond is the darling of Wall Street these days.
Monday morning its stock price was trading at about $14.40, its highest level since early spring when things were still looking much more hopeful for the troubled Big Box home furnishings retailer.
Even more incredulous, the stock has almost tripled in price over the past month, making it one of the biggest gainers in the entire stock market.
Not bad for a company with serious declining sales, red ink all over its bottom line, cash flow issues that could force it into bankruptcy and, oh by the way, no permanent CEO, having fired its last one in June.
If you’ve been following along recently you know that Bed Bath has once again become a favorite plaything for the day-trading, meme-following, speculating crazies who have decided to punish all those professional short sellers and yeah, make some pretty good money for themselves. Maybe they are not so crazy after all.
There is also more substantive speculation that the company is looking for some additional credit lines to bolster itself while it tries to figure out how to undo the mess it’s in. Plus, there might also be a sale of its BuyBuyBaby banner, which could result in an infusion of $800 million to as much as $1 billion in funds, again providing at least a short-term financial lifeline. And while those are legitimate reasons why investors might be attracted to a stock that still seems to have good will with its customers and has had a sustained history of success it’s more likely that the same traders who have spiked prices of other companies like AMC and GameStop are the ones causing all of this commotion.
The retailer could only hope there was much this much activity in its stores. While it tries to clear out a wealth of distressed merchandise to get its balance sheet well…more balanced, numerous first-hand reports – including from this reporter – show many stores looking just awful and sparsely populated by shoppers. A Yahoo Finance report chronicled visits to two locations on Long Island near New York City and said they “indicate a retailer under severe stress amid elevated discounting and slow-moving inventory.” A series of 12 pictures posted with the story showed heavy clearance area contrasted with empty shelves in other parts of the store, all in a rather haphazard merchandising scheme that was the antithesis of the clean, streamlined plan put into place by department CEO Mark Tritton.
My visit to a store in the Atlanta market painted a similar picture. A back-to-school area that should have been overflowing with seasonal merchandise was underwhelming. Sale signs were everywhere, the only thing more ubiquitous being what seemed an insanely excessive amount of Uggs branded merchandise, a brand that had been a staple of the bed and bath side of the store and one of the few national labels that survived the push to private brands.
For anyone who believes that Wall Street has very little to do with Main Street, the perplexing dichotomy that is Bed Bath Beyond circa Summer of 2022 is one of the best proofs we’ve seen in a long time.
And one suspects the wild ride is far from over.
WarrensReport 