Even as Bed Bath & Beyond’s senior management team spent two hours telling some 500 of its suppliers that it was working hard to right the retail ship and stay away from even more troubling times, some of those vendors reacted with the request “Show us the money.”
Yesterday, the Big Box retailer, on its fourth CEO in four years and embarking on yet another turnaround strategy, held a virtual vendor “summit” for suppliers designed to instill confidence that good times were ahead, even if the presentation appeared to be more rah-rah than full of details.
In conversations with vendors who attended (watched is more like it) the presentation on Wednesday they said they came away with generally positive reviews, particularly in light of the announcement that morning that Sue Gove had had the interim prefix removed from her CEO title. They liked the fact that, for better or worse, it meant there would not be yet another leader coming along who would start from scratch again and delay any turnaround even further.
Gove told vendors the company was working to keep accounts payable current, reiterating it to the Wall Street Journal in an interview posted today where she said “Our accounts payable are as clean as they have ever been.”
But vendors contacted by Warrensreport said that while they are mostly being paid on time, it is not without pushing in some cases to get those payments processed. They also said they had been in touch with some suppliers who are at least 90 days behind in getting paid, indicating that the payment process is somewhat selective depending on the size of the vendor.
BBB declined to comment on the meeting to Warrensreport.
Of more concern to vendors were the prospects going forward. In its push to get fresh merchandise into stores for spring of 2023 the retailer is starting to place orders for goods that would be delivered in the first quarter of next year. For many suppliers that means committing to raw materials and manufacturing with their Asian suppliers in the next few weeks. Two BBB vendors said they were concerned about making those financial investments now in light of the retailer’s financial picture. Even if the company has worked to right its balance sheet at the moment, they were worried that come next April or May when they would get paid that things would be worse and a bankruptcy filing could occur. Gove told the WSJ “We don’t think there is a bankruptcy on our horizon.” However that horizon may not stretch into the middle of 2023, these vendors, who wished to remain off the record, said.
Bed Bath stock has had a small uptick this past week, hitting $5.64 on Wednesday after falling to as low as $4.31 earlier in the week. Still its share price has declined about 60% from its high for the year and even that was driven more my meme-influenced day traders than anything fundamental to the company itself.
Gove told the Journal “We’ve got much work to do,” and vendors who sell to BBB certainly wouldn’t argue with that. Many would like that work to start with cutting them checks.