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The retailer estimated that it would record a loss of $386 million in its latest quarter, much worse than the $276 million loss in the previous year, and said it would need more time than expected to close its books. As of March, Bed Bath & Beyond had roughly $3 billion in debt.
The company’s share price closed nearly 30 percent lower on Thursday, giving it a market capitalization of $150 million. At its peak in 2013, the company’s market value was $17 billion.
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In addition to a possible bankruptcy, Bed Bath & Beyond is exploring a number of options to shore up its balance sheet, including selling pieces or all of the company. To help with those efforts, it is working with advisers at the law firm Kirkland & Ellis, the consulting firm Alix Partners and the investment bank Lazard, the two people familiar with the matter said. Alix Partners and Lazard declined to comment. A spokesman for Kirkland did not respond to a request for comment.
“No determinations have been made as of this time,” Julie Strider, a Bed Bath & Beyond spokeswoman, said in a statement regarding the retailer’s next steps.
Its ability to obtain cash through those means will determine whether it needs to file for bankruptcy.
Bed Bath & Beyond plans to give an update on Tuesday about its efforts to raise cash.
A bankruptcy filing would give Bed Bath & Beyond the chance to shed debt and stores and emerge as a leaner, stronger company, as Neiman Marcus was able to after filing for bankruptcy in 2020. But if performance deteriorates, or its suppliers decide they will not offer their support, Bed Bath & Beyond could be forced to close, like Toys “R” Us.
“What we’ve seen many times is that it ends up being a stay of execution,” Michael Baker, a retail analyst at D.A. Davidson, said. “Sometimes that works, but oftentimes you see an announcement of scaling back and having fewer stores and then that’s followed by a complete liquidation.”