Troubled retailer Bed Bath & Beyond (NASDAQ:BBBY) has been in talks with potential buyers and lenders in an attempt to keep its business afloat in the wake of a possible bankruptcy, CNBC reported. The company is in the middle of a sale process to seek a buyer so that both its namesake store banner and the Buybuy Baby chain continue to operate.
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Last week, the New York Times reported that BBBY is in discussions with the private equity firm Sycamore Partners to sell its assets, including its BuyBuy Baby stores, as part of a possible bankruptcy process.
Meanwhile, BBBY’s advisors are looking for a loan of at least $100 million to ensure sufficient liquidity for the company to continue running its business. “Multiple paths are being explored and we are determining our next steps thoroughly, and in a timely manner,” a BBBY spokeswoman said.
BBBY has been reducing its workforce, closing stores, and cutting down its expenditure as part of its efforts to revive its business. The company’s turnaround initiatives failed to boost its sales and improve its financial position. In the first nine months of Fiscal 2022, sales declined over 28%, while loss per share increased considerably to $13.4 from $3.90 in the prior-year period. Given the dismal financial position, a rebound in BBBY’s business looks difficult, especially in the midst of the ongoing macro pressures.
Is BBBY a Good Buy?
BBBY stock has rallied 57% since the start of 2023, thanks to the revival of meme stocks rally. Nonetheless, Wall Street is highly bearish about BBBY due to poor fundamentals. The Strong Sell consensus rating for BBBY stock is based on six unanimous Sell ratings. At $1.36, the average BBBY price target implies a possible downside of 65.5%.
