NEW YORK (AP) — Shares of Bed Bath & Beyond lost nearly a quarter of their value Wednesday after the struggling home goods retailer announced a restructuring that includes store closures, layoffs and a possible stock offering.
The company said it has obtained more than $500 million of new financing and was reducing 20% of its workforce. It plans to close about 150 namesake stores but will keep its buybuy Baby chain.
Bed Bath & Beyond also said that it would go back to its original strategy of focusing on national brands, instead of pushing its own store labels. That reverses a strategy embraced by its former CEO Mark Tritton who was ousted in June after less than three years at the helm amid slumping sales and supply chain issues. Executives on a call with analysts on Wednesday vowed that what makes the new approach different is that it would not return to its “stock-it-high” merchandising approach.
Mara Sirhal, executive vice president and brand president for the Bed Bath & Beyond brand division, said on the call that customers have communicated that “national brands are an important part of their shopping experience with us.” The company said it is working closely with its suppliers.
The retailer said Wednesday in a Securities and Exchange Commission filing that it may offer, issue and sell shares of its common stock from time to time. It plans to use the proceeds to pay down its debt, among other uses.
Bed Bath & Beyond, based in Union, New Jersey, has been facing lots of turbulence recently. In mid-August, shareholder activist Ryan Cohen, the billionaire co-founder of online pet-products retailer Chewy Inc., sold his entire stake in Bed Bath & Beyond after buying a big stake just months before and pledging to make big changes.
The company said that it is still searching for a permanent CEO. Board member Sue Gove took over as interim CEO, replacing Tritton. Tritton previously been the chief merchandising officer at Target where the more than 30 new brands he introduced were key in that company’s revitalization.
Chief Operating Office John Hartmann is leaving the company, and it’s eliminating that position.
The company said it expects a decline in comparable sales of 26% in its fiscal second quarter. It is slated to report its final results next month.
Shares fell 24%, or $2.92, to $9.19 in early trading on Wednesday, after closing down more than 9% to $12.11 in regular markets Tuesday.