The bank account may be dwindling, layoffs and store closings continue and the shelves in the stores are increasingly barren. But there seems to be no shortage of consulting companies being hired by Bed Bath & Beyond for its next moves, including a potential bankruptcy sometime in the very near future.
Today CNBC reported the beleaguered Big Box retailer had retained the Cole Schotz law firm “to assist in a potential filing in U.S. Bankruptcy Court.” The online store attributed the information to “people familiar with the matter…who weren’t authorized to speak publicly.”
Bed Bath continues to issue its standard boilerplate response to queries on these activities, stating “We have a team, internally and externally, with proven experience helping companies successfully navigate complex situations and become stronger.” Cole Schotz did not respond to CNBC for comment.
According to reports, including from CNBC, this is at least the third consulting firm BBB has retained. One is Kirkland & Ellis, which it describes as “the law firm well known for representing bankrupt companies.” CNBC earlier reported that the retailer had hired the consulting company AlixPartners, another firm often brought it for financial restructurings. CNBC said Alix replaced Berkeley Research Group, but did not cite a reason for the switch.
All of this extracurricular activity comes as the Nasdaq stock exchange notified BBB it was not in compliance with its regulations for filing earnings statements on time. BBB responded it expected to get up to date on its filings within 60 days. Trading in the company is not impacted by the Nasdaq statement and the stock continued to bounce around this week although it has declined from last week’s $5.22 high and was trading at about $3.40 as of mid-day Friday.
Additional speculation this week has centered on possible suitors for all of the company, most probably following a bankruptcy filing. The two names that have surfaced are private equity firm Sycamore Partners, an active player in the retailing sector with ownership of Belk, Staples and several apparel chains, and Authentic Brands Group, the brand aggregator whose retail holdings include Brooks Brothers, Forever 21 and Aeropostale. Again, there have been no confirmations of these reports, either from BBB or the potential acquirers.
But all of this activity seems to certainly suggest the old cliché that where there’s smoke there’s fire…or a fire sale.