Struggling home-goods retailer Bed Bath & Beyond is close in on securing a new loan deal to boost its liquidity.
Days after suppliers said they halted or restricted shipments to Bed Bath & Beyond for falling behind on payments, The Wall Street Journal reported that the New Jersey-based company told lenders that it had found a new source of financing. However, Bloomberg reported that the retailer has yet to actually secure the loan but is closing in on the deal.
The loan would undoubtedly shore up the company’s liquidity. It had previously sought $375 million in financing to cushion its depleting cash reserves as it searched for a way to correct previous corporate missteps. However, media reports now state the loan amount could be upwards of $400 million.
Bed Bath & Beyond has about a dozen stores and a distribution center in the Metroplex.
The company ended its second quarter (Q2) with a $108 million cash balance, down $992 million from the year before. Its CEO ended up stepping down after the negative Q2 earnings report, which clocked a higher-than-expected profit loss.
Representatives for Bed Bath & Beyond and company advisers Kirkland & Ellis, and Lazard have not responded to a request for comment.
Earlier this year, Bed Bath & Beyond hired the advisory firm Berkeley Research Group to help direct its focus on optimizing its balance sheet. This has included a greater emphasis on cash inventory and plans to cut at least $100 million in planned capital expenditures.
It has been a wild month for Bed Bath & Beyond shareholders.
The company stock (NASDAQ: BBBY) exploded by more than 300% earlier this month amid a frenzy of retail trading and an uptick in news coverage over activist investor Ryan Cohen’s stake in the company.
Cohen ended up filing to sell his entire stake in the company last week, sending the stock plummeting during after-hours trading and erasing all the gains made during the August run-up.