Bed Bath & Beyond inventory tanks after layoffs, store closings and stock float

Shares of Bed Bath & Beyond ( BBBY ) are smoking early Wednesday as investors get more clarity on the mess facing the embattled retailer.

On Wednesday morning, in an SEC filing and press release ahead of an investor presentation, the company outlined plans to issue more stock, close 150 stores and lay off 20% of its staff as the retailer tries to stem the bleeding from a collapse discounts.

Shares of the retailer fell more than 24% in premarket trading at 8:06 a.m. ET.

In a statement ahead of its presentation to investors, Bed Bath & Beyond said it received commitments for $500 million in additional financing, bringing its current liquidity to about $1 billion as the company fights for survival. The retailer also filed with the SEC to sell up to 12 million additional shares of common stock.

Bed Bath & Beyond outlined plans to cut costs by $250 million in its 2022 fiscal year and cut 20 percent of its corporate and supply chain staff as it slims down its operations.

The company also said it plans to close 150 underperforming stores and said it “continues to evaluate its portfolio and leases, in addition to staffing, to ensure alignment with customer demand and promotion strategy.”

In the current quarter, Bed Bath & Beyond expects comparable sales to fall 26% from a year ago. for fiscal 2022, the company expects corporate sales to fall 20%, with improvements in the decline in the second half of the year. Bed Bath & Beyond is currently in its second fiscal quarter.

The buybuy BABY brand, for which activist investor Ryan Cohen had urged the company to explore alternatives, will remain within the Bed Bath & Beyond structure for now.

“The Board of Directors believes that, at this time, buybuy BABY will provide greater value for the Company’s shareholders as part of the Bed Bath & Beyond Inc. portfolio,” Bed Bath & Beyond said in its release Wednesday.

The statement added: “The board and management team have identified various strategies to implement effective, organic changes to accelerate further growth and unlock the brand’s full potential, including building on digital platforms and platform registries, addressing additional age groups and expanding products and services. “

Shop Shop baby store and logo in Edmonton, Alberta, Canada. (Photo by Artur Widak/NurPhoto via Getty Images)

On the leadership side, the company said it will eliminate the COO and Chief Stores Officer roles instead creating new brand president roles to lead Bed Bath & Beyond and buy BABY, respectively.

Wednesday’s presentation by the company comes amid recent reports that Bed Bath & Beyond has hired Kirkland & Ellis, known for its restructuring and bankruptcy work, to help manage its debt. Bloomberg also reported that some suppliers had stopped shipments after the company fell behind on payments.

BBBY stock has been one of the market’s biggest surprises this summer, with the stock rising from about $4 a share to $28 as meme trading rebounded.

Ryan Cohen, GameStop’s chairman and head of the meme exchange, sold his entire position in the company earlier this month after taking a 9.8% stake in the company in March. That position in Bed Bath & Beyond had grown to more than 11.5% after the company bought back shares this year.

Even with Wednesday’s early-morning crash, shares of Bed Bath & Beyond remain on pace to gain more than 80% so far this month, though the stock is now down more than 70% from its recent highs. two weeks ago.

This is breaking news and will be updated.

Brian Sozzi is editor-in-chief and Anchor on Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and up LinkedIn.

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