Bed Bath & Beyond said Thursday that it will soon share its turnaround strategy, as it burns through cash and tries to win back customers ahead of the holiday season.
The home goods retailer will have an investor update Wednesday morning, it said in a news release. Shares rose more than 5% in after-hours trading Thursday.
Interim CEO Sue Gove said in the release that the company’s call will include “a preview of strategies and changes being implemented across the enterprise to deliver results for all stakeholders.”
She added: “We recognize the strong interest in our company and our plans to better serve customers, recapture market share, drive growth and profitability, ensure our vendors are supported, and strengthen our balance sheet.”
Bed Bath & Beyond is on the clock to grow sales and convince investors that it has a path forward. It is looking for a new CEO after its board pushed out Mark Tritton earlier this summer. It has lost market share to competitors, as it trimmed back its 20% coupons and introduced unfamiliar private brands. And its shares have plummeted, especially after activist investor Ryan Cohen sold off his entire stake in the company last week.
On top of that, the home goods sector is under pressure, lapping a period of unusually strong demand during the peak of the pandemic. It is also a discretionary category that is more vulnerable as shoppers spend more on food and other necessities because of inflation. Those cooling sales have left many blenders, toaster ovens and coffee makers on deep discount at big-box and specialty stores alike.
Bed Bath said in June that its first-quarter net sales were down 25% year over year, resulting in a net loss of $358 million. It did not give a forecast, but said at the time that it expected sales to recover in the second half of the fiscal year.
The economic backdrop compounds Bed Bath’s troubles, said Neil Saunders, managing director of GlobalData Retail.
“If you are running up a down escalator, internally, with the external environment, you’re running up the down escalator that’s on superspeed,” he said. “It’s a really difficult, if not impossible, task because this is not the best of environments to be trying to recreate your business.”
It is reportedly seeking a lifeline from lenders. According to a report by The Wall Street Journal, the company is close to finalizing a $400 million loan to give it cash to pay the bills and build credibility with suppliers. The report cites people familiar with the matter. The company is finalizing negotiations with Sixth Street Partners, which has lent money to other troubled retailers including J.C. Penney, the Journal said.
Bed Bath has made other changes, along with ousting its CEO. Former merchandising chief Joe Hartsig, one of the architects of its private label strategy, has left the company along with Tritton. It has a new chief accounting officer. It launched a new loyalty program and has axed at least one of its private brands, Wild Sage.
As of Thursday’s close, shares are down about 31% so far this year. Shares closed on Thursday at $10.10, down about 2.5%. The company’s market value is $807.6 million.