Bed Bath & Beyond Has Gone Completely Broke?

Bed Bath & Beyond has been contending with mounting troubles for years on end, now it appears the company may be flat broke.

By Jennifer Hollohan | Published

bad bath & beyond

Bed Bath & Beyond stocks took a nosedive on Monday, dropping a whopping 11%. However, that is nothing compared to the impact they felt last week. Toward the end of the week, investor Ryan Cohen announced he planned to sell nearly his entire stake in the company. Once news of his plan got announced, Bed Bath & Beyond stocks plummeted 60%. 

Cohen’s investment firm, RC Ventures, filed a notice of its intent to sell with the Securities and Exchange Commission. The total number of shares RC Ventures will sell is roughly 7.78 million. While these shares are not Cohen’s entire stake in Bed Bath & Beyond, they are the majority. So, the sale deals a tremendous blow to the already struggling company.

Moreover, Bed Bath & Beyond recently made news headlines over the fact that multiple suppliers have ceased product shipments. Contrary to what one might assume, the shipment halt has nothing to do with supply chain issues. Instead, it is the result of the company not paying its bills.

According to suppliers, Bed Bath & Beyond has enough late payments that they no longer trust its ability to pay the bills. So, they will no longer ship to the retailer until the finances are squared away. And, given the latest round of bad news, it may be a while before that happens.

Shortly after Cohen announced he was selling his shares in the company, several firms revoked Bed Bath & Beyond’s short-term financing and credit insurance. Based on this news, it appears neither its creditors nor suppliers have faith in the failing company. But their recent struggles do not come out of left field. Unfortunately, the retail giant has been accumulating significant problems for years now.

They recently underwent a leadership overhaul because of the mounting issues. Their latest and now former CEO, Mark Tritton, only joined the company in 2019. Bed Bath & Beyond’s leadership brought him in to try and salvage an already sinking ship. But the company’s performance remains so dismal that they announced in June that Tritton was getting ousted.

That move may prove to be too little, too late. Bed Bath & Beyond has steadily lost customers for years over poor product selection, out of stocks, and stores that looked ragged at best. The pandemic only added to their financial pain. 

Things got so bad financially that reports emerged they cut the air conditioning to some stores to conserve spending. The supposed AC cut happened in the heat of the summer, and their stores have no other form of ventilation. Bed Bath & Beyond denied the report’s veracity. But it seems customers did not believe them.

Shortly after the report hit, Bed Bath & Beyond launched a sale with shockingly low discounts. This sale happened well before its traditional back-to-school promotions, so it was a little out of place. Additionally, the sale had no promotional event tied to it. It was simply an unusually deep sale. Since the company’s stocks and financial outlook continue to fall, that promotional effort may well have been in vain.