Dive Brief:
- Home goods retailer Bed Bath & Beyond announced Thursday that there is “substantial doubt about the company’s ability to continue as a going concern,” according to a press release.
- The Union, N.J.-based company – which has sought to execute a turnaround strategy amid external and internal challenges that include inventory constraints, reduced credit limits and the death by suicide of its CFO Gustavo Arnal in September – stated it expects to report a net loss of about $385.8 million for the third fiscal quarter ended Nov. 26, compared to a net loss of $276.4 million in the year-earlier period due in part to lower customer traffic and reduced inventory.
- While the company said it continues to take steps to mitigate any potential liquidity shortfall, it is also considering all strategic alternatives including restructuring or refinancing its debt, selling assets and bankruptcy.
Dive Insight:
Bed Bath & Beyond stock plummeted Thursday in the wake of the news. The company’s shares were down 24% at $1.83 in afternoon trading.
Bed Bath & Beyond has been facing a growing litany of financial woes for some time. Last summer Industry Dive sister publication Retail Dive reported that the firm was at risk of having to file for bankruptcy.
The death of the company’s CFO last year also sent shock-waves across Wall Street and became a flashpoint for new conversations around C-suite mental health care and the rising pressures challenging even the most battle-tested finance leaders.
Leadership questions raised by Bed Bath & Beyond’s struggles were also seen by some governance experts as a wake-up call for boards that pointed to the importance of having succession plans in place for all C-suite executives.
After Arnal’s death the company swiftly looked within its own ranks and picked its then chief accounting officer Laura Crossen to be its interim finance chief. At the time Sue Gove was interim CEO, having replaced the retailer’s former CEO Mark Tritton when he stepped down in June. In October Gove was named the company’s official CEO and president and the interim was removed from her title.
In a statement Thursday Gove asserted that the company still had a promising future, noting the importance of its moves to initiate the turnaround at the start of the third quarter and the fact that it had “strengthened its leadership.”
“Our plan has two anchors: the first enables us to refocus merchandising and inventory, operate more efficiently, and grow our digital and omni-capabilities, and the second focuses on strengthening our financial position. Transforming an organization of our size and scale requires time, and we anticipate that each coming quarter will build on our progress,” Gove stated.
The company has scheduled a Jan. 10 third-quarter earnings call.
