Bed Bath & Beyond Inc. Announces Completion of Public Equity Offering and Provides Strategic Update
Bed Bath & Beyond (NASDAQ: BBBY) has completed a public offering of Series A convertible preferred stock and warrants, raising approximately $225 million in gross proceeds. An additional $800 million is expected, contingent upon certain conditions. The funds will be used to repay debt under their credit facility, waiving existing defaults. The company is refocusing its business strategy with plans to optimize its store footprint, investing in inventory, and enhancing digital sales. Bed Bath & Beyond aims to operate about 360 stores and approximately 120 buybuy BABY stores, adapting to changing shopping preferences.
- Raised approximately $225 million in gross proceeds from the offering.
- Plans to repay debt, decreasing financial liabilities.
- Optimizing store footprint to focus on more profitable locations.
- Investment in inventory and infrastructure to enhance customer experience.
- Focus on digital sales channels expected to increase profitability.
- Future installments of $800 million are uncertain and not guaranteed.
- Potential reliance on further financing increases bankruptcy risk.
- Need for asset-light inventory strategies may indicate operational struggles.
Net Proceeds of Offering to Immediately Repay ABL Facility
Default Under Credit Agreement Waived
Company's Turnaround Plans to be Further Supported by Realigned Store Footprint and Cost Structure
The net proceeds from this transaction will be used immediately to repay outstanding borrowings under the Company's credit facility, thereby fulfilling conditions set forth in an amendment to the credit facility waiving defaults thereunder that was entered into concurrently with the initial closing of the offering. The Company expects to reborrow loans under its amended credit facility to enable its strategic initiatives in fiscal 2023, which will be further supported by a realigned store footprint and cost structure.
The Company will continue to execute its customer-focused turnaround plans by optimizing its store footprint, investing in inventory, and pursuing infrastructure improvements. Specifically, the Company has initiated incremental store closures in its
The Company's go-forward channel mix will facilitate better execution of inventory prioritization and distribution, particularly across its smaller brick-and-mortar store footprint. The Company will also be pursuing asset-light inventory management strategies to drive growth, including vendor-direct-to-consumer, marketplace, and the potential for innovative collaborations.
Finally, the Company has identified significant opportunities across its infrastructure and operations. Supply chain, technology, expense structure, and business processes will continue to be streamlined as the Company realigns its operational foundation. These changes will help the Company strengthen business partnerships with suppliers, real estate, and service partners, who remain a priority.
B.
The securities were offered pursuant to an automatically effective shelf registration statement on Form S-3 filed with the
About the Company
The Company operates websites at bedbathandbeyond.com, bedbathandbeyond.ca, buybuybaby.com, and buybuybaby.ca.
Forward-Looking Statements
This press release contains a number of forward-looking statements. Words such as "expect," "will," "working," "plan" and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Company's beliefs and expectations relating to the receipt of the full amount of gross proceeds of the Company's previously announced financing transactions and the anticipated use of proceeds therefrom and the Company's ability to execute its transformative plans. These forward-looking statements are not guarantees of future results and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond the Company's control. Important factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the uncertainties related to market conditions and the receipt of the full amount of gross proceeds from such financing transactions on the anticipated terms or at all, the Company's ability to use proceeds from such financing transactions to pay down outstanding debt obligations and operate its business; risks related to the failure to receive the full amount of gross proceeds from such financing transactions, which the Company expects will likely force it to file for bankruptcy protection; the Company's ability to regain access to its credit agreement; the Company's ability to deliver and execute on its turnaround plan; the Company's potential need to seek additional strategic alternatives, including restructuring or refinancing of its debt, seeking additional debt or equity capital, reducing or delaying its business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the
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