Sycamore will put the final nail in the coffin.
19 replies (most recent on top)
Forbes reporting this morning that the potential acquisition of BBB from multiple candidates has fell through and is headed for bankruptcy. Is there anyone really surprised?
https://www.forbes.com/sites/markfaithfull/2023/01/23/bed-bath--beyond-meme-stock-bounce-flops-toward-bankruptcy/?sh=5a2beab3314e
The end of the end is nigh.
At this point they will end up in Chapter 11 only if they are lucky. This entire company looks primed for a complete fire sale and disappear completely. As mentioned here by someone they can't even secure DIP financing which they need for CH11. Each day that passes without filing and not reporting their Q10 the further into debt they go. They are at zero hour now even to get CH11. Leave it to BBB to even s crew up declaring bankruptcy.
All the smart folks have left BBBY corporate. The company can’t do anything right because they don’t have any true leadership talent left, and even today admitted that they are not in compliance with NASDAQ rules (https://finance.yahoo.com/news/bed-bath-beyond-inc-receives-211500578.html) that only make matters worse and lessens confidence in the company’s financial future by vendors and suppliers.
It’s the middle class corporate worker and store associates who are suffering as a result, as when they lose their jobs they won’t be given golden parachutes.
@2rwp+1kJLW0o1 I think my question was more rhetorical than an honest question. I know they’re done, but this guy couldn’t have been cheap (500K-750k??). This one makes the least sense to me from bed baths side….but even more my that guys side. Why would you leave a 15yr career at Macys to come to this titanic??
@2mqi+1kJLW0o1 Why did they buy back millions of dollars of their own stock when that money could have went to pay vendors and some of their debt? There is a track record here of head scratching decisions. They don't know what they are doing and make terrible decisions, that's why. I'm answering your question seriously. I hope you are not looking to that hire as evidence they won't file CH11 or liquidate the entire business.
Why would they hire that SVP from Macys 2 weeks ago if all they’re going to do is fold up?
My guess is that Sycamore might buy Baby and then BBB will go to liquidation, and then sell the IP to a company that will move it to online only or license it out. Harmon has little value on its own.
With how quiet things have been, the fact they are way overdue on their 10Q, there is a high likelihood this turns into a complete fire sale and liquidation of the entire company. This is playing out like they aren't even getting anyone to buy into DIP financing. Plus all this time since they announced those terrible earnings they have lost even more. Lenders that supply the DIP financing like Sycamore most likely see there is nothing here to salvage.
The closing stores (10-15% of remaining BBB) will be considered WRITTEN OFF ASSETS. Just straight cash influx. The company doesn’t care what’s left because their inventory and stores are gone anyways.
They will document the other 85% for inventory purposes and send those with the bankruptcy proceedings.
So they probably selected stores that are either A) Expensive to run or B) had high/excessive shrink or horrible inventory numbers to shutter. I expect a lot of big cities/metro regions will get hammered (think Boston, Philly/NYC, LA, and Seattle).
@1xuv+1kJLW0o1 do you realize they are now 12 days LATE to file their 10Q? Even after the extension they were given. The only realistic reason for this is they are trying to file CH 11 but are not getting the DIP financing they need. If this really is the case it is worse than bad. They most likely only cancelled some stores because they are the ones that would hurt the most. Each passing day that goes by without reporting their 10Q is a step past CH11 and right to CH7. Also to just sell off Baby is near impossible at this point because they are not profitable and it is part of BBB as a whole. To purchase Baby the buyer would also be taking on significant debt of BBB and it makes no sense. Just because Baby is the most profitable aspect of BBB as a whole does not make it profitable as a whole, just look at their decreased sales. They are terrible.
What I’m saying is there is plenty of room on the market for a brick and mortar baby store- if done correctly. It’s the only true dedicated brick and mortar baby store in the US.
It has upside and interest because of its potential, regardless of any “deterioration“.
Regarding inventory, they postponed about 10% of the stores. So if they are trying to keep the shrink numbers off the books why only postpone inventory in 10% of the stores but proceed with 90% as scheduled?
Inventory will show massive shrink when it comes to stock putting BBB further in to debt.
The downfall of Baby is not solely on no items on the shelves. That concept has been deteriorating for over a year now. Also the person who stated why inventory is being delayed is spot on. A company like Sycamore will require an inventory to be done prior to finalizing any buyout deal. They don't want to pay for what does not exist. Sycamore may not be the final nail but in reality all BBB concepts inventory results will be. They are already minus over 500 million after selling all assets they own. Imagine the total assets they own are 20% or so less than what is being counted? It is quite possible they will skip chapter 11 and go right to 7.
Hey, we are all aware of why Bloodbath does not want an inventory across its companies. They will be revealed as having much less stock on hand than Sycamore or any other suitor is willing to cough up. I agree that Baby was profitable until recently but it was also overvalued about 6 months ago by BBBY. What is "overvalued minus 20%"?
In response to the response. Yes, and so was the earlier overvaluation of Buy Buy.
I worked for BBBY in 660 Union for more than a decade. I now work for a retailer owned by Sycamore. Compared to BBBY, Sycamore is awesome. I great treated better by my Sycamore owned company that I ever did by BBBY. Holidays, PTO, Training, bonus paid in cash every year, now of the 8 year vesting schedule for the near worthless shares, etc. Sycamore understands that treating associates well leads to happy customers and sales growth...
In response to the down 20% post- sales were down 20% because there is no product on the shelves- because the company can’t afford to fully stock the stores. There is absolutely room for a brick and mortar baby store, the last quarter sales are irrelevant. They’ve been putting up positive comps for years, but it’s hard to do when the shelves are empty.
And it is pretty perverse to call it an asset when sales were only down by 20 % last quarter, but it's true.
That’s their only real asset. If they sell, it’s over. It’s already over, but that’s the last nail.