Inside Bed Bath & Beyond’s plan to reduce debt
Big box housewares retailer Bed bath and beyond (NASDAQ:BBBY) saw sales plummet for many years before ousting management in late 2019 and embarking on a new path. The business seemed to be at an all-time low even before the coronavirus, which further lowered sales.
But the sun was already rising on the company’s dark times when new CEO Mark Tritton assembled a new leadership team and began executing his plan to boost digital sales, raise cash and refocus on core brands. . Now that stores have reopened, sales are picking up and with the closure of PersonalizationMall.com, Bed Bath & Beyond has lifted the suspension of its debt reduction program.
Finally move on
During the first quarter conference call in July, Tritton outlined many of the ways the company is seeing progress, including an 82% increase in digital sales and curbside pickup available at 60% of stores. Management focused its full attention on maintaining liquidity through store closures and closed the first quarter with $1.8 billion in funds available.
This included a suspension of debt reduction to ensure liquidity until it could generate revenue, which happened with the reopening of stores. On Monday, Bed Bath & Beyond launched a tender offer to buy up to $300 million in debt at face value.
The company had suspended its debt reduction program in light of economic conditions, and it also suspended dividends and share buybacks. He said he would “assess where appropriate” so these could also be restored soon. Shares fell on Monday after the announcement.
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