NEW YORK (AP) — Shares of Bed Bath & Beyond lost nearly a quarter of their value Wednesday after the homeware retailer announced a restructuring that included store closures, layoffs and potential layoffs.
The company said it received more than $500 million in new funding and cut 20 percent of its workforce. It plans to close around 150 stores under the same name, but BuyBuy Baby will keep the chain.
Bed Bath & Beyond also said it would return to its original strategy of focusing on national brands rather than promoting their own. It reverses the strategy used by former CEO Mark Tritton, who was sacked in June less than three years later due to declining sales and supply chain issues. In a phone call with analysts on Wednesday, executives promised that the new strategy is different as it won’t revert to a high-stocked merchandising strategy.
Mara Sirhal, Vice President and Head of Brands, Bed Bath & Beyond Brands, said customers report that “national brands are an important part of their shopping experience with us.” The company said it works closely with its suppliers.
The retailer said Wednesday it may offer, issue and sell common stock from time to time, in a filing with the Securities and Exchange Commission. He plans to use the proceeds to pay off debt, among other things.
Bed Bath & Beyond, based in Union, New Jersey, has had a lot of problems lately. In mid-August, activist shareholder Ryan Cohen, billionaire and co-founder of online pet products retailer Chewy Inc., sold his entire stake in Bed Bath & Beyond, which bought a large stake just months ago and promised to make big changes.
The company said it is still looking for a permanent CEO. Board member Sue Gove replaces Tritton as interim CEO. Tritton was previously director of merchandising at Target, where the more than 30 new brands he introduced played an important role in the company’s rebirth.
COO John Hartmann leaves the company and the position is eliminated.
The company said it expects similar sales to fall 26 percent in the second fiscal quarter. Final results are scheduled to be reported next month.
Shares fell 24 percent, or $2.92, to $9.19 in early trading on Wednesday, after falling more than 9 percent to $12.11 in regular markets on Tuesday.
Source: Breitbart
