Bed Bath & Beyond securing funding in frantic effort to avoid bankruptcy

Bed Bath & Beyond may no longer need to file for bankruptcy any time soon after obtaining the funds it needs to keep the company going. The struggling retailer reportedly finalized a stock offering that is expected to infuse over $1 billion in equity into the company in an attempt to block bankruptcy and liquidation.

Bed Bath & Beyond managed to bring in $225 million in the offering and expects to receive another $800 million in profits over time. Moreover, it was able to secure a $100 million loan from one of its lenders which is Sixth Street Partners.

On Tuesday, Feb. 7, the company's stock dropped by more than 48%, and its market value is around $353 million. In any case, as stated in its recent securities filing, Bed Bath & Beyond will use the funds it will get in paying off some of its debts after defaulting on its loan with JPMorgan Chase last month, plus missing a $25 million interest payment last week.

After paying, the company will use the leftover funds in its attempt to get the business to run smoothly again. However, the New Jersey headquartered merchandise retail store chain warned that in case the deal failed to work, it is likely to still end up filing for bankruptcy with its assets being liquidated as well.

The firm said that as it tries for a turnaround, it will keep the costs low in its stores. To do this, the plan is to reduce the number of its brick-and-mortar store. The target is to operate just 480 locations which will consist of 360 Bed Bath & Beyond outlets and 120 Buy Buy Baby stores.

Thus, it was announced earlier this week that it would be shutting down another 150 branches of Bed Bath stores. In recent months, it has already closed 200 in addition to 50 Harmon Face Values locations.

"This transformative transaction will provide runway to execute our turnaround plan. We continue to put our customers at the center of every decision, positioning Bed Bath & Beyond to meet and exceed their expectations, while resetting our foundation for near- and long-term success," Bed Bath & Beyond's president and chief executive officer, Sue Gove, said in a press release for the announcement of Completion of Public Equity Offering and Provides Strategic Update.

She added, "We are optimizing our store fleet and supply chain and continuing to invest in our omni-always capabilities. This will enable us to better serve our customers, and grow profitably, by directing merchandise where and how they want to shop with us."