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B.Pioneering home goods retailer ed Bath & Beyond appears to be headed for bankruptcy. But you can’t necessarily tell that by visiting the flagship store in New York’s Chelsea neighborhood or looking at the stock this week.
Last year, Bed Bath & Beyond was among the so-called “meme stocks” of the ailing video game retailer Gamestop and the movie chain, whose shares were pushed to dizzying heights by a new generation of online traders. Includes AMC.
BB&B has been bubbling again this week, with its stock price more than doubling in a week, amid speculation on online stock forums including Reddit that it is a potential takeover target.
The company’s Chelsea store appears to be doing better than most, with shoppers scouring the aisles, but with many items heavily discounted.
Still, some shoppers were unsure about the company’s future. “It’s a great store, but there are very few items on the shelves elsewhere,” says Chintan Patel.
He said he followed the moribund Bed Bath & Beyond. Another shopper said the company “ruined itself.”
Indeed, Chelsea shoppers and memetic stock traders are unlikely to save Bed Bath & Beyond.
The company said last week that it could enter Chapter 11 bankruptcy within weeks, wondering if it can stay in business after its share price plunged more than 30% after a quarter’s heavy losses and declining sales. Even with this week’s rally, which brought the stock close to $5, the stock is down 68% over the year.
On Tuesday, the company reported a loss of nearly $400 million. In October, more than 40% of his products at retailers were out of stock as suppliers pulled out. This is double his level in the first half.
“We lost a third of our revenue and plunged an already beleaguered company into chaos.
But the story of Bed Bath & Beyond is a strange tale of the power and destruction of the Internet. Wall Street analysts thought the likes of Amazon and Walmart would eat into the retailer’s business, but billionaire Ryan Cohen, founder of online pet food company Chewy, has invested 7 million shares in the company. After making more purchases, the company’s stock soared in a wave of frenzy last year.
Online investors following Reddit’s r/wallstreetbets forum have crowned Cohen as the “1,000-year reigning meme king” and piled on.
Whether investors actually saw Bed Bath & Beyond as a solid business or simply saw an opportunity to sell at a higher price is an open question.
Other headline memetic stocks used by online traders to punish hedge funds and other investors have also hit the ground. fell 82% to
The party ended last August when Cohen announced plans to sell his 9.8% stake in the company for $178 million. This led to a sale among followers of the meme stock and an alleged pump-and-dump scheme. A month later, Gustavo Arnal, former chief financial officer of Bed Bath & Beyond, died after jumping from a gorgeous Manhattan skyscraper.
By then, the retailer’s stock had lost more than 70% of its yearly value, and the company said it was looking to turn things around with a strong holiday season.
But attempts to streamline product lines were complicated by the bottlenecks of the pandemic, lack of online investment, and frustrated consumers who suddenly returned to face-to-face shopping and found themselves short on options.
Unlike many retailers, Bed Bath & Beyond was not the typical retailer to collapse in competition with online retailers like Amazon. At its peak in 2013, BB&B was valued at his $17 billion. A company that hasn’t added debt to its balance sheet for 20 years now has $1.5 billion in debt as shoppers go online.
In August, the company took on even more debt after post-pandemic shoppers failed to materialize. This week, retailers valued him nearly $550 million.
“Multiple avenues are being explored and we are making thorough and timely decisions on next steps,” said Susan Gove, Chief Executive Officer who launched the turnaround plan four months ago, in a statement. rice field.
But if or when Bed Bath & Beyond seeks bankruptcy protection, many will mourn its demise. The chain was founded in 1971 by Leonard Feinstein and Warren Eisenberg, who opened their first store in Springfield, New Jersey as Bed and Bath. By 1987, as big-store fashion exploded, Bed n’ Bath expanded across the state, adding the “Beyond” label to more products and their names, becoming a classic category killer. became. It went public in 1992 and six years later sales surpassed his $1 billion mark.
As shoppers perused the aisles on Tuesday, many speculated that the days of shopping in-store were numbered. said he hadn’t and still isn’t buying
“I don’t think the market will necessarily allow these megastores to continue to exist,” he said. I’ve seen department store retailers go that route.”
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