Bed Bath & Beyond said Wednesday it would cut 20% of its corporate and supply-chain staff and close 150 poor-performing stores as it seeks to cut costs amid a sales slump. Shares of the company plunged 25% in morning trading.
The company also said it has lined up $500 million in new financing, including a $375 million loan. It also announced plans to sell more shares to the public, with the proceeds directed toward paying down debt. The retailer added that its second-quarter same-store sales crumbled about 26% compared with the year-earlier period. The company had reported a net loss of $358 million in its most recent quarter.
Bed Bath & Beyond has been struggling with declining sales and mounting losses as consumers have shifted to competitors. Earlier this year, GlobalData analyst Neil Saunders noted in a research report that the chain's stores are "rather messy and lack basic merchandising discipline."
While its shares had attracted meme-stock traders, the retailer lost one of its big investors earlier this month when Ryan Cohen, the billionaire founder of online pet food company Chewy, sold his stake.
The retailer is overhauling its strategy and operations as consumers cut back on spending amid high inflation and weaker household finances, noted Saunders in a research note Wednesday.
"Bed Bath & Beyond is reinventing itself at the worst possible time," Saunders wrote. "Indeed, the preliminary second quarter results – with a catastrophic sales decline of 26% — underline the extent of the problem."
Bed Bath & Beyond said it would streamline its store brands by discontinuing three of its nine labels: Haven, Wild Sage, and Studio 3B.
The company has almost 1,000 locations, which means that it will be shuttering about 15% of its stores, according to FactSet. Bed Bath & Beyond would not provide a list of which stores it would shutter, telling Axios it would "share more information when available."
In 2020, the company said it expected to close at least 200 of its stores over the following two years.