'Meme Stock' Bed Bath, Closes 150 Stores and Lays Off 20% of Employees... Stock Price Plummets 20%

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Bed Bath & Beyond (BBBY), a U.S. household goods retailer that gained attention as a Wall Street 'meme stock,' announced a restructuring plan on the 31st (local time) that includes securing new loans, laying off 20% of its employees, and closing stores. However, despite this announcement, Bed Bath & Beyond's stock price is plummeting more than 20% on the New York Stock Exchange.

According to the Wall Street Journal (WSJ) and others, Bed Bath & Beyond revealed that it secured over $500 million in new financing from JPMorgan Chase and Six Street Partners, including an expansion of its existing credit line.

Additionally, to reduce costs, the company decided to close 150 low-productivity stores. As of the end of May, Bed Bath & Beyond operated approximately 955 stores. Furthermore, about 20% of company and supply chain employees will be laid off. The company also plans to discontinue one-third of its private label brands.

This is part of the restructuring plan. Bed Bath & Beyond expects these measures to reduce expenses by approximately $250 million in the 2022 fiscal year. Recently struggling with liquidity issues, Bed Bath & Beyond reported a 26% drop in quarterly sales in its latest earnings announcement.

Alongside this, Bed Bath & Beyond also submitted a preliminary prospectus for a common stock offering.

On the New York Stock Exchange near the close of trading that day, Bed Bath & Beyond was trading around $9.6 per share, down more than 20% from the previous session. Having surged over 400% through mid-month this month, signaling a 'meme stock' revival, Bed Bath & Beyond has recently been falling following the sale of shares by Ryan Cohen, chairman of GameStop. Although the news of securing new loans briefly sparked a rebound, the stock declined again that day. However, it remains at a higher level than about $5 per share at the end of last month.

This content was produced with the assistance of AI translation services.