Bed Bath & Beyond Collapses

The bottom fell out of the Bed Bath & Beyond Inc. (NASDAQ: BBBY) share price. A rescue effort was based on a higher price than Monday’s $0.81 a share. Dilution from an equity deal may have ruined that chance of a lifeline from Hudson Bay Capital Management. The plan was always risky. Bed Bath& Beyond’s future was destroyed last year. (Here are 25 brands that customers are abandoning.)

Bed Bath & Beyond never had a chance. In its most recently reported quarter, revenue dropped 33% from the prior year to $1.3 billion. The company lost $392 million. The holiday season may have been worse. Its inability to pay suppliers must have cut inventory during the busiest part of the year. No one should be surprised if revenue fell 40% in a year and the retailer lost several hundred million dollars.

Bed Bath & Beyond also has closed hundreds of stores. That means its footprint of locations is smaller. In turn, many people must travel farther to reach its stores. Convenience is usually a part of shopping habits.

Bed Bath & Beyond is also faced with the challenge that many of its products are sold by larger retailers, including Walmart and Target. Walmart’s footprint is well over 4,000 stores.

What does Hudson Bay see in Bed Bath& Beyond? Perhaps a chance to cut its employees to zero and liquidate inventory. There is not much else to do.

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