'From my perspective, it does not change the long-term outcome of this business. Katz called Bed Bath & Beyond’s stock offering a 'last-ditch' effort to stave off bankruptcy. And those gift cards may become valueless.' Is Bed Bath & Beyond heading toward bankruptcy? But 'there is a real risk that any retailer entering bankruptcy won't come out. 'Even if Bed Bath & Beyond enters bankruptcy, it is highly likely that it is going to honor its gift cards,' he said. Whether or not those are the actual items that you want to purchase on sale is the concern.'Īs for shoppers wondering whether their Bed Bath & Beyond gift cards are safe, Morrison said consumer-focused companies entering bankruptcy work 'as hard as possible' to honor gift cards and warranties during the bankruptcy process to retain customer confidence. 'I suspect there will be sales at the locations that they are closing. 'The high-demand products will be more likely to be delivered to the locations that will remain operating,' Katz said. Morningstar analyst Jaime Katz said the company will likely move products from the shuttered locations to other stores, although shoppers could see certain products get marked down inside stores set to close.

It's unclear how quickly Bed Bath & Beyond will shutter its stores or what the closures mean for inventory. operations to 360 Bed Bath & Beyond locations and 120 buybuy Baby stores. So to see a firm issue equity at this moment is really unusual.'īed Bath & Beyond on Tuesday said it would continue to focus on turnaround plans by “optimizing its store footprint, investing in inventory, and pursuing infrastructure improvements.”Īfter operating more than 950 stores globally this time last year, the company aims to pare down U.S. 'Usually that means that a bankruptcy filing is highly probable in the coming weeks. And keep in mind that Bed Bath and Beyond is not just a distressed firm – that its major lender has declared default,' he said. 'It's rare for a highly distressed firm to raise equity. Last month, the company revealed that it defaulted on its credit line with JPMorgan.Įdward Morrison, a professor at Columbia Law School, said the company's decision to sell shares was a surprise. But it isn't addressing the underlying issues that have put the company into the position that it's in.'īed Bath & Beyond list of stores closing: Bed Bath & Beyond closes another 87 stores in 30 statesīed Bath & Beyond: Company warns of possible bankruptcy as sales continue to decline Bed Bath & Beyond raising $1Mīed Bath & Beyond said the money from the share sale will be used to repay outstanding debt. 'It can alleviate their immediate distress. The share sale 'is a lifeline,' said Diane Lourdes Dick, a law professor at the University of Iowa. While the deal is a boon to the company's turnaround efforts, experts say the retailer may still be on a path to bankruptcy. Hudson Bay did not immediately respond to a request for comment from USA TODAY, and Bed Bath & Beyond declined to confirm. The company has so far raised about $225 million and expects to sell an additional $800 million worth of shares over time.īloomberg reported that Hudson Bay Capital Management is the anchor investor in the share sale. The retail chain this week said it plans to close an additional 150 stores and raise more than $1 billion in funding through a public stock offering. Watch Video: Fed's Powell sees long road ahead on inflationīed Bath & Beyond is takings steps to avoid bankruptcy, but some worry it's too little, too late.

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