Customers carry bags from Bed Bath & Beyond Store on April 10, 2013 in Los Angeles, California.
Kevork Djansezian | News from Getty Images | Getty Images
bed bath beyond announced on Wednesday that it is working with Hilco Global to get goods back on shelves in the company’s recent effort to stay afloat and avoid bankruptcy.
The housewares retailer has entered into a supplier consignment program with ReStore Capital, an investment manager at Hilco that provides “creative financing solutions” for struggling businesses.
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Under the terms of the agreement, ReStore Capital will purchase up to $120 million of pre-order merchandise from Bed Bath’s key suppliers on a revolving basis at any time to increase inventory at its namesake chain and Buybuy Baby.
Bed Bath has struggled to replenish its shelves after its suppliers tightened credit terms, cut limits and required upfront payments before agreeing to fill orders, the company previously said.
CEO Sue Gove said Bed Bath remains “relentless” in its attempts to overcome its operational and financial challenges.
“Our new supplier consignment program allows us to increase our stock position on top items that customers buy and improve the customer experience. This low-capital solution may allow us to strengthen commodity availability and better meet demand,” Gove said in a press release.
“We’re doing what we have to do to sustain our business immediately and unlock our true value over the long term – for everyone involved.”
Noting the support the company has received from its top suppliers, Gove said it shows Bed Bath’s “potential for sustained improvement”.
“We know that the performance and value of our company today is not representative of our full potential,” Gove continued. “Our entire organization is focused on expanding and accelerating improvement.”
Bed Bath has exhausted all efforts to avoid bankruptcy court after a series of dismal quarters plunged the company into the red and drained its cash flow.
Last week, the company announced preliminary results for the fourth fiscal quarter. It announced net sales of approximately $1.2 billion and comparable-store sales declined in a range of 40% to 50%. Bed Bath said negative operating losses continued despite noting it hasn’t used up its free cash flow.
The company reported revenue of $2.05 billion for the fourth quarter of fiscal 2021.
In February, it announced what was then believed to be a Hail Mary stock offering that was supposed to bring the company more than $1 billion in equity but ultimately only raised $360 million, the company said.
On March 30, Bed Bath announced another $300 million stock offering, warning that it would likely have to file for bankruptcy protection if it didn’t go through.
The two deals diluted Bed Bath’s stock, which has been in steady decline, and hampered fundraising efforts. The company’s shares were trading at around 35 cents. Its market value is $151.5 million at the close on Tuesday.