Struggling retailer Bed Bath Beyond is short in a debt exchange designed to give the company some financial breathing room. The debt exchange offer will be extended from December 19 to December 19 from December 5, the company said Tuesday.
According to the retailer right hand column in chart below, the extension shows limited appetite by debt-holders in the debt swap. This limited appetite likely reflects the concern among debt-holders on Bed Bath Beyond's survivability and getting paid back if the company should go bust, according to the data provided by the retailer right hand column.
The retailer has struggled with a lack of sales, weak store traffic, low cash levels, and merchandise that is not aligned with customer tastes for a long time. The board removed Bed Bath Beyond's turnaround CEO Mark Tritton earlier this year. Other execs fled as cash-saving, cost-cutting efforts are underway.
The company, which has been heavily discounting products this holiday season in an effort to raise badly needed cash, has shown no signs of life under new CEO Sue Gove.
Comparable store sales fell 26% from a year ago in the second quarter as the economic slowdown and poor inventory quality weighed on store traffic. The company posted an operating loss of $168 million in the quarter because of the challenged top line and increased discounting.
Bed Bath Beyond's stock has gone down 16% in the past month compared to a 4.5% gain for the S&P 500.
The debt swap efforts may have an ugly go of Bed Bath Beyond during the all important holiday season, but that is not helping sentiment or the debt swap efforts.
In November, US web traffic for Bed Bath Beyond dropped by 19%, according to Jefferies analyst Jonathan Matuszewski. The decline worsened from Thanksgiving through Cyber Monday with a crash of 25% compared to the previous year.
Matuszewski slashed his estimates for Bed Bath Beyond across the board.
Matuszewski warned that we are lowering our comparable sales estimate to - 23% from - 15% prior to the fiscal third quarter. Management indicated that the quarter-to-date trend through September had not changed significantly from the fiscal second quarter, but we now believe it's weakened as the quarter progressed with sustained pressure in November. Sozzi follows BrianSozzi on Twitter and LinkedIn.