Bed Bath & Beyond seeks to offer additional shares for sale
Bed Bath & Beyond, a subsidiary of Beyond, Inc., announced on Friday its plans to issue up to $150 million in additional common stock shares. The funds will be utilized to rebalance the company's inventory and product assortment, as well as to reduce debt. As of last August, the retail giant's long-term debt stood at $1.7 billion.
The company previously issued an additional 12 million shares earlier this year, generating approximately $75 million in proceeds. The new shares will be listed under Bed Bath & Beyond's existing at-the-market offering program.
Bed Bath & Beyond is currently undergoing a transformation, aimed at securing the company's future. In August, the corporation disclosed a plan that involves store closures, workforce reductions, and the cancellation of certain private labels, in a bid to refocus on national brands.
In the most recent quarter, the company reported a year-over-year net sales drop of 28% to $1.4 billion, while comparable sales declined by 26%. The operating loss increased significantly, reaching $346.2 million compared to $84.1 million in the same period last year. The net loss also grew, reaching $366.2 million compared to $73.2 million in the earlier period.
To manage its debt further, Bed Bath & Beyond announced a bond exchange offer earlier this month. This move entails the purchase of three groups of senior unsecured notes and the issuance of new notes due in 2027, featuring varying interest rates and terms. Following this announcement, S&P Global Ratings downgraded Bed Bath & Beyond's corporate credit rating, deeming the offering exchange "distressed."
Beyond, Inc. has also been strengthening its partnership with Kirkland's. This partnership involves a credit facility expansion by $5.2 million, which permits the conversion of outstanding debt into shares of Kirkland's common stock (subject to certain conditions). Beyond is also acquiring Kirkland's intellectual property for $5 million, with the agreement to be licensed back to Kirkland's. These moves are part of a broader strategy to augment Beyond's brand portfolio.
The additional funds raised from issuing common stock shares, as announced by Bed Bath & Beyond, could potentially be used to finance its ongoing debt reduction strategies. As the retail industry grapples with financial challenges, Bed Bath & Beyond continues to seek strategic business partnerships, such as the one with Kirkland's, to strengthen its financial position and diversify its brand portfolio.
