Bed Bath & Beyond Inc. plans to file for bankruptcy in the next few weeks, according to people who know about the situation. The company has had poor sales and can't compete with big online and big-box stores.
According to one of the sources, the U.S. home goods retailer is considering skipping debt payments due on February 1, which is a typical cash-saving measure for companies on the verge of bankruptcy.
Shares of the retailer, which used to be the leader in products like small appliances and bed sheets, closed Thursday at $1.69, down 30%. This happened after the company said it expected to have a big loss in the third quarter and that there was a lot of doubt about whether or not it could stay in business.
The company stated that it was evaluating a variety of options to address its plummeting sales, including filing for bankruptcy. The store said that it hasn't decided for sure what it will do in the future.
According to securities filings, the company has interest payments due on approximately $1.5 billion of bonds due on February 1. People who know about the situation say that the company is thinking about skipping the payment to save money. This would likely give the company a 30-day grace period before the company went into default.