Bed Bath & Beyond (BBBY) stock is getting smoked early Wednesday as investors get more clarity on the mess facing the struggling retailer.
On Wednesday morning, in an SEC filing and a press release ahead of an investor presentation, the company outlined plans to issue more stock, close 150 stores, and fire 20% of its staff as the retailer looks to stem the bleeding from a collapse in sales.
Shares of the retailer were down more than 21% as of the market close on Wednesday.
In a release ahead of its investor presentation, Bed Bath & Beyond said it received commitments for $500 million in additional financing, bringing its current liquidity to roughly $1 billion as the company struggles for survival. The retailer also filed with the SEC to sell up to 12 million additional shares of common stock.
Bed Bath & Beyond outlined plans to cut costs by $250 million in its fiscal 2022 and will cut 20% of its corporate and supply chain staff as it leans out the operation.
The company also said it plans to close 150 underperforming stores and said it "continues to evaluate its portfolio and leases, in addition to staffing, to ensure alignment with customer demand and go-forward strategy."
In its current quarter, Bed Bath & Beyond expects comparable sales to fall 26% from the prior year; for its fiscal 2022, the company expects comp sales to fall 20%, with improvements in the decline during the second half of the year. Bed Bath & Beyond is currently in its fiscal second quarter.
The buybuy BABY brand, which activist investor Ryan Cohen had urged the company to explore alternatives for, will remain within the Bed Bath & Beyond structure for now.
"The Board of Directors believes that, at this time, buybuy BABY will deliver greater value for the Company's shareholders as part of the Bed Bath & Beyond Inc. portfolio," Bed Bath & Beyond said in its release on Wednesday.
The statement added: "Board of Directors and management team have identified several strategies to implement impactful, organic changes to accelerate further growth and unlock the brand's full potential including building on its digital and registry platforms, addressing additional age groups and expanding products and services."
On the leadership side, the company said it will eliminate the roles of COO and Chief Stores Officer instead creating new brand president roles to lead Bed Bath & Beyond and buybuy BABY, respectively.
Wednesday's presentation from the company comes amid recent reports Bed Bath & Beyond has hired Kirkland & Ellis, known best for their restructuring and bankruptcy work, to help manage its debt load. Bloomberg also reported some suppliers had paused shipments after the company fell behind on payments.
BBBY stock has been one of the market's biggest curiosities this summer, with the stock surging from around $4 per share to north of $28 as the meme trade came roaring back.
Ryan Cohen, the chairman of GameStop and a ringleader of the meme stock trade, sold his entire position in the company earlier this month after taking a 9.8% stake in the company back in March. That position in Bed Bath & Beyond had increased to more than 11.5% following share buybacks from the company this year.
Even with Wednesday's early morning crash, Bed Bath & Beyond shares remain on pace to gain more than 80% so far this month, though the stock is now down over 70% from highs reached just two weeks ago.
This is breaking news and will be updated.