Bed Bath & Beyond at Risk of Stock Market Delisting

A person exits a Bed Bath & Beyond store in Manhattan, N.Y., on June 29, 2022. (Andrew Kelly/Reuters)

Following its failure to file third quarter 2022 results with the Securities and Exchange Commission (SEC), retail store chain Bed Bath & Beyond has now been informed by Nasdaq that its listing is at risk, as the retailer’s financial woes continue.

Bed Bath & Beyond received a notice from the Listing Qualifications Department of Nasdaq, the world’s second-biggest stock exchange, on Jan. 12, informing the firm that it isn’t in compliance with requirements for continued listing. The firm has yet to file its quarterly report on Form 10-Q with the SEC for the period ending Nov. 26, 2022.

“The Notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Select Market. The Notice states that the Company has 60 calendar days from the date of the Notice, or March 13, 2023, to submit a plan to regain compliance with the Listing Rule,” the company said in a filing with the SEC.

“If Nasdaq accepts the Company’s plan to regain compliance, then Nasdaq may grant the Company up to 180 calendar days from the prescribed due date of the Quarterly Report, or July 10, 2023, to file the Quarterly Report to regain compliance.”

Facing Financial Difficulties

The Nasdaq delisting notification comes as Bed Bath & Beyond has been mired in financial difficulties. On Jan. 5, the retail chain stated that it had incurred recurring losses and suffered negative cash flow for the nine months that ended on Nov. 26, 2022.

For the three months that ended on Nov. 26, the company reported a net loss of $393 million compared to a $274.6 million loss during the same period a year back. This pushed the total loss for the first nine months of the fiscal year to $1.9 billion.

The losses and issues with cash flow made the firm conclude that “there is substantial doubt about the Company’s ability to continue as a going concern.”

CEO Sue Gove said the company has initiated a “turnaround” process that involves focusing more on digital sales and operating efficiently, which began at the beginning of the third quarter.

Last week, the retail store started selling assets to Sycamore Partners, a private equity firm, ahead of what many see as potential bankruptcy.

The company has initiated incremental cost reduction measures to the tune of $80 million to $100 million, aimed at delivering roughly $500 million in annual savings. This includes scaling down its overhead expenses and headcount. The retailer has also announced plans to shut down stores at 150 locations.

Struggling Retail Firms

In addition to Bed Bath & Beyond, a few other retailers are also facing a tough time, with some filing for bankruptcy.

Party City, the biggest party goods and Halloween specialty retail chain in the United States, filed for bankruptcy protection on Jan. 17. As of the third quarter of 2022, the company was $1.8 billion in debt.

Based in Hudson, Ohio, Jo-Ann Fabrics, formally known as JOANN, has been facing rising costs, declining sales, and falling margins.

The firm reported an 8 percent fall in net sales during the third quarter and announced the suspension of its quarterly dividend in a bid to improve its balance sheet and liquidity, making some suspect whether the business can survive without filing for bankruptcy.

Drugstore chain RiteAid has been facing deteriorating financing, leverage issues, and low valuation since April 2022. In November 2022, Fitch Ratings downgraded the company’s long-term issuer default rating from B- to C. CEO Heyward Donigan has left the company.