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Investing.com — Shares in Bed Bath & Beyond Inc (NASDAQ:BBBY) fell sharply in premarket U.S. trading on Monday after the embattled retail chain filed for bankruptcy protection following years of underperformance.
Earlier in 2023, the home goods company tried to stay afloat through a complex sale of preferred stock and warrants that aimed to raise $1 billion. However, that deal was scrapped last month, leading the company to announce a last-ditch effort to garner $300 million from investors.
But neither this fundraising drive nor a series of store closures have proven to be enough. Bed Bath & Beyond is now expected to use the bankruptcy proceedings to give it time to conduct a liquidation of some or most of its assets.
The process, which typically places debt repayments above shareholder recoveries in the hierarchy of importance, will likely lead to individual stakeholders losing their positions.
Should a bidder for the business come forward, Bed Bath & Beyond said it would pursue a sale and move away from liquidation.
The retail chain, which was once a hugely-popular staple of suburban American life, had previously attempted to overhaul its operations to combat flagging demand for its privately-branded products. This push ultimately turned out to be unsuccessful, with Bed Bath & Beyond posting a loss of about $393M and a 33% fall in sales in the quarter ended on November 26.
