The sign is seen past an overturned shopping cart outside the Bed Bath & Beyond Inc store. in Greendale, Wisconsin.
Daniel Acker | Bloomberg | beautiful pictures
Shower beds and more said on Thursday that it did not have enough cash to pay its debts and that it had failed to pay its line of credit with JP Morgan, again warning of the possibility of bankruptcy.
Bed Bath shares plunged on Thursday afternoon, briefly halting trading. Shares eventually fell about 20%, giving the company a market value of about $300 million.
In stock recordsThe struggling home goods retailer said it “does not have the resources to repay the amount under the Credit Facility and this will prompt the Company to consider all strategic alternatives, including including debt restructuring under the United States Bankruptcy Code.”
Bed Bath owes $550 million under an asset-secured loan with JP Morgan and $375 million to a Sixth Street lender after expanding its credit facility last August.
Amid tough macro challenges, Bed Bath’s suppliers tightened credit terms and cut limits while demanding earlier payments in the second fiscal quarter, which made the you can’t Store inventory properly before the holiday, the file states. Some vendors require prepayment, the company said.
Thursday’s update comes a few weeks after the retailer issue a “concern” realizes that it may not be able to cover its expenses after a worse-than-expected quarter.
Bed Bath has been exploring its options in recent weeks. The retailer discussed reducing its financing to keep it afloat should it have to file for bankruptcy, CNBC previously reported.
The company is also in the process of selling in hopes of keeping the chain of stores of the same name and running the Buybuy Baby business. Additionally, the company is preparing for a chapter 11 filing in the United States Bankruptcy Court in New Jersey, CNBC previously reported.
Shares of Bed Bath & Beyond have fallen about 80% in the past 12 months.
This is an evolving story. Check back for updates.
