Bed Bath & Beyond announced on Monday that it would give some of its bondholders shares in exchange for repaying a tiny percentage of its around $1 billion in debt.
On Monday, Bed Bath & Beyond’s stock dropped more than 5% to $3.74 after the company disclosed a stock dilution. Earlier in the day, its fall had been more pronounced. On Monday, the stock, which is down 74% for the year so far, reached a new 52-week low.
The troubled retailer has recently been dealing with a leadership shakeup, strained relationships with suppliers, and the fallout from a meme-stock frenzy sparked by activist investor Ryan Cohen, who later sold his shares. This is in addition to its mountain of debt.
More than $1 billion in unsecured notes issued by Bed Bath & Beyond have maturities in 2024, 2034, and 2044.
Bed Bath & Beyond announced on Monday that it would issue 11.7 million shares of stock to settle $123 million in debt, including approximately $69 million in 2024 notes, $5.8 million in 2034 notes, and $48.2 million in 2044 notes. The price of all the unsecured notes has been below par.
Bed Bath & Beyond announced new debt financing in August, which was anticipated to give it some wiggle room, particularly with suppliers.
Prior to what may be a make-or-break holiday season, the store has been working to regain customers.
The chief customer officer of the business quit earlier this month, the most recent in a string of executive moves at Bed Bath & Beyond. The board fired Chief Executive Officer Mark Tritton and Chief Merchandising Officer Joe Hartsig earlier this year. In the meantime, the company’s chief accounting officer left, and the chief operating officer and chief stores officer positions were dissolved. CFO Gustabo Arnal committed suicide in September.