American IKEA filed for bankruptcy amid a strong drop in sales

Household goods chain Bed Bath & Beyond plunged 24%. The company warned it was looking into bankruptcy to deal with falling US sales.

Photo: Joe Raedle/Getty Images

Trade network of household goods Bed Bath & Beyond – American analogue of the Swedish IKEA – statedthat there are serious doubts regarding its ability to continue as a business for the foreseeable future. The retailer will continue to explore strategic alternatives, including restructuring or refinancing debt, selling assets or filing for bankruptcy, the report said.

In the third quarter of fiscal year 2022, which ended November 26, 2022, the company’s net sales were approximately $1.26 billion, compared with $1.88 billion last year, which reflects a decline in customer traffic and the level of available stocks. The net loss for the quarter was regarding $385.8 million compared to a net loss of $276.4 million last year. The final results will be presented on January 10th.

As explains Bloomberg, in recent months, some partners have begun to stop deliveries to the retail chain, as they were concerned regarding its prospects. This exacerbated Bed Bath & Beyond’s already precarious financial situation. The agency also emphasizes that the drop in sales during this period indicates how serious the problem is, since it is at this time that consumer spending in the United States is highest.

Shares of Bed Bath & Beyond plunged 24% to $1.83 at the open of the US stock market. The last time securities traded at this level was almost 30 years ago, in February 1993. As of 19:00 Moscow time, quotes are down 24.48% to $1.82.

The figures presented mean that Bed Bath & Beyond will need to raise more funds to continue its work. believes Neil Saunders, an analyst at the consulting company GlobalData Plc. He also believes that bankruptcy is the most likely outcome. According to the expert, the company might sell its chain of stores Buybuy Baby, but it will not be easy. Formerly agency figured outthat Bed Bath & Beyond was considering such a deal, but declined in the hope of finding a better price offer.

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During the year, the retailer struggled with falling sales, weak store footfall, low cash flow, and products that didn’t meet customer tastes. notes Yahoo Finance. In late December, Loop Capital analyst Anthony Chukumba said the company would “disappear” in a year.

Shares of “American IKEA” have risen in price by almost 350% in three weeks

Bed Bath & Beyond store in Miami, USA

Shares in Bed Bath & Beyond rose nearly 350% in three weeks last summer. This was primarily due to the activity of investors who united on the Reddit platform. Users of this site at the beginning of 2021 dispersed the quotes of the so-called “meme” shares – GameStop and AMC Entertainment Holdings – on the exchanges. Shares in Bed Bath & Beyond are down 83% in 2022, far outpacing the 20% drop in the S&P 500 index.

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