BBB is the Box That Keeps Crying Bankruptcy Wolf

It’s starting to get a little old.

Every few days, the folks at Bed Bath & Beyond cook up another scheme designed to pump a little more life back into their disastrous retail operation and every time, the statement ends with “and if this doesn’t work we may be forced to file bankruptcy.”

We’re not saying the situation isn’t dire and things aren’t on the brink of total implosion — as well as admire the company’s efforts to try to stay in business however it can — but you have to ask, why don’t they just do it already and move on?

The company did it again Monday morning when it issued a statement about its upcoming reverse stock split shareholders meeting scheduled for May 9. Sue Gove, the CEO who keeps pulling financial rabbits out of her hat, all the while sounding the alarm at every chance, made sure she included the standard disclaimer: “A failure to obtain shareholder approval for the reverse split proposal will likely force us to file for bankruptcy as we will have insufficient common stock to enable us to raise additional equity financing.”

This statement, or some variation, has been attached to everything the retailer has said for months as it has raised cash, sold off new shares, brought in new investors and generally bent the financial rules in ways nobody ever thought was possible.

What is worth noting is that with each financing plan, the amount of money projected to be raised seems to go down…and down. First it was a billion dollars, then $360 million, then $200-and-something million and the last time we checked, about $120 million for the latest “thing.” This is not a good direction to go when it comes to raising money and it pretty much reflects the steady-and-increasingly-not-slower decline of BBB’s overall retail business.

And there’s always a new deadline: last week some analyst projected three weeks until D-Day – actually that would be B-Day, as in Bankruptcy Day – and now it’s May 9 for this special shareholders meeting. What happened to the late-April date when the company needed a certain amount of market value to qualify under SEC requirements?

All the while, its stock price continues to tumble, down to under 30 cents a share by mid-day on Monday, April 10. As one finance newsletter pointed out, the stock has fallen 98% in the past 12 months. We didn’t even think that was possible.

Lots of people – including the employees at the better-than-expected store I visited last week in the Atlanta market who are fighting to keep their jobs – want BBB to come out of this alive. I’d like that too.

But this crying-wolf thing is just played out. Find something that really works or do what needs to be done and start over. It’s exhausting.

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