Is BBB About to Go to the Great Beyond?

It seems to be happening faster than you can redeem one of its ubiquitous coupons.

In a matter of just weeks – even days – the deterioration of what was once one of America’s best retailers, Bed Bath & Beyond, has accelerated at a speed even the frenetic world of retailing rarely ever sees.

With the exits of two big shareholders who together owned (or had the right to own) 18% of the company and reports that the company has retained a debt restructuring consulting company (read bankruptcy advisor), Bed Bath’s stock price is in freefall, losing more than 60% of its value in a little more than 36 hours.

In the meantime, a number of vendors who sell the home furnishings Big Boxer are saying off-the-record that they have cut off the retailer and are no longer shipping it product. Several say they are not being paid for past orders and are no longer getting information from the company as to when – or if – they will receive money owed.

It’s a sad, sad crash for the giant retailer which has tumbled through losses for most of the past six financial quarters and is now searching for its fifth CEO in just four years following its firing of a president and chief merchant who were brought in to turn it around but failed.

The roller coaster ride of the stock – up to close to $30 a share just a few days ago and now hovering around $11 on Friday morning, a victim of meme-crazed day-traders riding it for all its worth – is certainly the most visible sign of the chaos surrounding Bed Bath. But two other factors could be much more devastating.

The cut-off from suppliers, if it becomes more widespread, could force the retailer into bankruptcy to get short-term financing to buy new merchandise. In many previous retail collapses it’s been the suppliers to those companies who have pushed them into Chapter 11. Even with a surplus of inventory in its stores, BBB desperately needs new goods for the Christmas season and into the first part of 2023 to replace its lackluster current merchandising line-up of private label goods.

The second factor is from a Bloomberg Law report that cites a source who did not want to be identified as saying “Bed Bath & Beyond Inc. hired law firm Kirkland & Ellis to help it address a debt load that’s become unmanageable.” Kirkland is well known in business circles for helping troubled companies, often resulting in bankruptcy filings. Bloomberg did not get confirmation from Kirkland or BBB on this news.

But it appears the company is frantically looking for more credit with the Wall Street Journal reporting the retailer is for a $375 million loan that it says “would be secured by equity in the company’s BuyBuy Baby brand.” The report comes from “people with knowledge of the matter,” according to the Journal. BBB did not respond to their inquiries for comment, either.

As its stock price continues to plummet while it works to get new financing, the outlook for Bed Bath is increasingly turning pessimistic. Retail history has shown that when companies start to go downhill they do it quickly and very often with devastating results.

The BBB slide continues to pick up momentum.