It appears that all the bad news, poor performances, executive turnover and negative investor recommendations are finally catching up with beleaguered Bed Bath & Beyond.
Friday morning the stock was trading at around $3.90 a share, representing a new 52-week high and it lowest levels since the retailer first went public in the early 1990s. And while there was nothing new specifically to depress the stock price, this continues a slow but steady decline in the company’s fortunes over the past few years, interrupted only briefly from time to time by meme-stock-trader-driven spikes that provided momentary rises. The company’s book value – the amount the company is worth based on all its shares multiplied by the current price – is now under $350 million. At its peak in the early 2010s when the share price soared to over $70 a share, the company was worth billions.
Not any longer.
Bed Bath management, led by no-longer-interim CEO Sue Gove has been working feverishly to save the business, securing more than $500 million in additional financing and credit to help stabilize its balance sheet and provide working capital to get it over its current cash flow troubles. It is aggressively cutting costs by reducing its headcount and closing stores in addition to reducing its capital spending and eliminating significant investments. And it has initiated new merchandising programs to wean itself off its unsuccessful private label strategy and more towards national brands and new pricing structures.
But none of it seems to be securing much confidence from investors. After several dismal quarters of seriously declining sales and significant losses the retailer is now two-thirds of the way through its third quarter with those results not expected until around the start of the new year. There have been no indications from management – good or bad – how it’s going so far but operating in a climate where overall home furnishings business has been falling at even the best retailers there’s nothing to indicate the numbers will be any better on the top line. Losses should be cut given the cost-savings but profitability seems unlikely.
In the meantime, another C-level executive has left the company, Rafeh Masood, its chief customer and technology officer. His departure came just days after BBB reported a date breach but the company specifically said the two actions were not connected. Nonetheless, he represents another high-level member of the management team put together by former CEO Mark Tritton who has left the company.
Vendors contacted continue to say off-the-record that they are shipping Bed Bath new merchandise and most said they are current on getting paid. Nevertheless, they said they remain very concerned and cautious in their dealings with the retailer, the larger ones insisting on fast payment terms.
As long as its suppliers continue to ship it merchandise, especially for the critical holiday season, Bed Bath will likely be able to avoid any more drastic steps, including bankruptcy, for the immediate future. But for shareholders, the slide continues, pushing the company into ever more depressed territory.
WarrensReport 