New Jersey, Sept. 1, (dpa/GNA) - Facing weak quarterly results, US home improvement retailer Bed Bath & Beyond Inc plans to introduce cost-cutting measures.
The struggling firm announced on Wednesday various measures to meet demand, drive growth and profitability, and improve its balance sheet and cash flows.
These include 20% job reduction plans and plan to exit a third of its Owned Brands, and to close 150 lower-producing banner stores.
The company also sees weak comparable sales in the second quarter and fiscal 2022.
In pre-market activity on the Nasdaq, the shares were losing around 24% to trade at $9.23.
For the second quarter, the company now expects net sales of approximately $1.45 billion and comparable sales decline of approximately 26%.
Further, for fiscal 2022, the company now expects comparable sales decline in the 20% range.
In its strategic and business update focused on changes, the company said cost optimization plans include a reduction in force, including approximately 20% across corporate and supply chain.
Further, it has identified and commenced the closure of approximately 150 lower-producing Bed Bath & Beyond banner stores.
The company is working expeditiously to increase its National Brands inventory where possible and will increase inventory penetration by 20 percentage points over the long term.
Accordingly, it will be exiting a third of its owned brands by discontinuing three of its nine labels, such as Haven, Wild Sage and Studio 3B.
The breadth and depth of inventory across the six remaining Owned Brands will be substantially reduced to 20 percentage points.
The company expects these actions to reduce SG&A by approximately $250 million in fiscal 2022.
The company said it has secured financing commitments for more than $500 million of new financing.
Bed Bath & Beyond also has realigned its executive leadership team. Mara Sirhal has been appointed to executive vice president and brand president of Bed Bath & Beyond. In addition, Patty Wu has been promoted to executive vice president and brand president of buybuy BABY.
The company has eliminated the chief operating officer and chief stores officer roles. Accordingly, John Hartmann and Gregg Melnick will be departing the company.
Regarding the ongoing CEO search, the company said it is in the earliest phase of the search process and will provide an update when appropriate.