Business In News
Bed Bath & Beyond is seeking shareholder approval for a reverse stock split in order to bolster its share price and “enable us to continue rebuilding liquidity to execute our turnaround plans and better position the company financially,” according to President and CEO Sue Gove. However, the news, which was released March 17, caused Bed Bath & Beyond’s share price to drop approximately 17% as of March 20.
The news came less than two weeks after Bed Bath & Beyond announced that its shares would be removed from the S&P SmallCap 600 Index and about a month after it announced that it had secured investor backing for more than $1 billion in capital. While the latter move may help the retailer stave off bankruptcy, it also contributed to Bed Bath & Beyond’s continued share price decline. As of March 20 shares were valued at 80 cents, down more than 95% year-over-year.
Investors have been unconvinced that Bed Bath & Beyond will be able to stay afloat even with a major cash infusion. The company shuttered its Harmon banner in January 2023 after failing to find a buyer, and it started the process of winding down its 54 Bed Bath & Beyond stores and 11 BuyBuy Baby locations in Canada in February.
Bed Bath & Beyond also has been downsizing its workforce. The retailer is planning to cut an unspecified number of jobs “across our corporate, supply chain and store portfolio” as well as eliminate the Chief Transformation Officer role, according to an internal memo from Gove. Additionally, 387 full-time employees and 1,038 part-time employees will be affected by the closures in Canada.
The retailer will hold a special meeting on March 27 to determine the exact ratio of the split, which could range from one-for-five to one-for-10.