Struggling US retailer Bed Bath & Beyond has raised around $225 million in an equity offering as it attempts to avoid bankruptcy.
The retailer, which raised the prospect of bankruptcy in January, said that it may get another $800 million in the next 10 months.
The fundraise will afford the company a few quarters to revive its business after a cocktail of factors such as the Covid-19 pandemic and a failed strategic shift towards own-brand goods left it in dire straits.
The company on Monday said that it planned to raise around $1 billion in a complex deal where it offered preferred stock and warrants, with Bloomberg reporting that Hudson Bay Capital Management (no relation to Canadian department store Hudson’s Bay) is the lead investor in this current share sale.
As per Reuters, Bed Bath & Beyond chief executive sent a letter to suppliers saying that the stock sale would “catalyse our efforts to turnaround the company,” and that it will “enable strategic initiatives in fiscal 2023, providing the resources and the needed runway" for its continued operation.
Last month, the company was reportedly in talks with a private equity firm over a sale. The retailer operates over 950 stores in the US.
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