Bed Bath & Beyond reportedly plans more layoffs and will eliminate the Chief Transformation Officer role currently held by Anu Gupta, according to an internal memo from CEO Sue Gove seen by CNBC. The cuts will impact the workforce “across our corporate, supply chain and store portfolio,” but Gove didn’t specify the total number of affected employees. The retailer had approximately 32,000 employees as of Feb. 26, 2022, according to a company filing.
“While we have taken several important initial steps in our turnaround plan with strong execution, our Q3 2022 results signal that it will take longer to translate actions into outcomes,” wrote Gove in the memo.
Investors responded favorably to the news, with share prices soaring 54% over the previous day. However, the price is still down more than 75% year-over-year.
Bed Bath & Beyond is staving off a potential bankruptcy following a weak Q3 2022, when sales fell 33% to less than $1.3 billion. This came on top of a 28% year-over-year sales decline in Q2 2022 and resulted in the company burning through about $300 million in cash during Q3, which ended Nov. 26, 2022.
Even buybuy BABY, which saw significant positive growth as recently Q3 2021, experienced a same-store sales decline in the low 20% range during Q3 2022. The retailer had reportedly been aiming to sell the brand in mid-2022, but a buyer never materialized.
The retailer now has $200 million in cash and equivalents remaining, which has contributed to its plans to consider alternatives — potentially including a bankruptcy filing in the coming weeks. However, Bed Bath & Beyond still has $500 million in total liquidity when its remaining credit lines are included.
Gove is aiming to preserve these funds and the company by cutting an additional $80 to $100 million in annual costs on top of the $400 million announced in August 2022. Those earlier savings are being driven by 150 store closures and a 20% cut to the company’s total workforce. At the time, the retailer operated a total of 955 stores, including 769 Bed Bath & Beyond locations.
Bed Bath & Beyond had aimed to reinvent itself with an emphasis on private label but that gambit ultimately failed to pay off. The retailer’s private label penetration fell 10 percentage points in Q3 compared with the first half of fiscal 2022, according to Gove.