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Bed Bath & Beyond not selling buybuy BABY

Yahoo Finance anchors discuss changes coming to Bed Bath & Beyond.

Video Transcript

[AUDIO LOGO]

- All right, shares, of Bed, Bath, and Beyond getting hammered as investors get more clarity on the struggling retailer following the release of the company's strategic changes to strengthen its financial positioning. This is a long list of changes that we're talking about when we talk about Bed, Bath, and Beyond all leading to that big drop we're seeing in the stock today-- a reduction in the workforce by 20% across the company, the company also saying that it's seeing a steeper drop in the current quarter, same store sales down 26%.

More shakeups on the executive level-- we've got the chief operating officer leaving the company, the company saying they're going to eliminate that position as well as the position of chief stores officer. And then on the merchandising side, they're saying they're going to be exiting about a third of their own brands. So you know, it's-- again, this has kind of been anticipated in terms of Bed, Bath trying to steer the ship in the right direction. But all of this coming down, of course, on a day when we heard from the company saying that they have secured significant financing.

- Yeah, and as you mentioned there are just so many folds to this. I think what's getting a lot of attention is the workforce kind of cuts in the same vein as Snapchat. But this is a very different story--

- Didn't even mention the store closures.

- Right.

- 150 stores.

- 150 stores, you know? And by the way, that's just a continuation of the secular story for Bed, Bath, and Beyond, which has already been kind of pruning back their physical footprint. But I think another thing that can't be forgotten here is that they are pretty adamant on doubling down on not selling their Buybuy BABY side of things. And that had been something that a lot of activists have been calling for, maybe spinning off that really strong asset and then allowing that to not be saddled down by the debt that the Bed, Bath, and Beyond site is carrying. Based off of the management node this morning, that's not on the table at least right now. Who knows what happens down the line?

But look, to try to keep this company afloat in terms of financing, you have to make sure that cash flow is coming through. So it's a little boring, but $500 million in new financing-- that includes an expanded asset-backed revolving facility for what they already had. I imagine a lot of that is backed by the healthy assets that they do have on their balance sheet.

These are all measures that they're using to try to make sure that they can continue to operate. But it's a very different story than Snapchat when it comes to-- this is a company that's trying to stay afloat. And these are just, you know, measures to make sure that cash--

- I mean, this has been several years coming, you could argue, right? I mean, but certainly noteworthy given that the interim CEO Sue Gove has now stepped in, Mark Tritton obviously leaving several months ago. I mean, this is sort of her setting the tone to say, this is where the company is going we're going to be aggressive about some of these cost cutting measures, and we need to steer the ship because they simply have not been able to execute on the turnaround.

- And I do kind of want to highlight that those are all the fundamental stories here. Now, of course, another big story around Bed, Bath, and Beyond--

- The meme side of things.

- --is the meme side of things, right? And what's really interesting is that what happened with GameStop in 2021, it rocketed shares of GameStop up to a level and kind of kept them elevated there where GameStop had the time and the ability to capitalize off of the higher share price to improve their capital position.

- AMC another one.

- AMC was another one. But Bed, Bath, and Beyond not as much the case, especially when you compare it to the pre-meme interest. Everything happens so fast because obviously when shares rocketed up to-- how high was it? I mean, $30 almost? It really only stood there for-- I think it was only a few days. And that's not enough time for management to try to capitalize off of it like GameStop and AMC did.

- That's a good point. But also, if we're looking at the stock move today, you could argue that how much of that jump that we saw in Bed, Bath where the stock is trading was driven by the meme trade, coming back down 22%. All of this, is this really just on the announcement today, or is this kind of where the stock should be more realistically given where the company is?