US home goods retailer runs out of cash, warns of bankruptcy for 2nd time in 3 weeks

By Ovunc Kutlu

ISTANBUL (AA) - US home goods retailer Bed Bath & Beyond announced Thursday that it has run out of cash to pay its debts and warned about the possibility of bankruptcy for the second time in three weeks.

"At this time, the Company does not have sufficient resources to repay the amounts under the Credit Facilities, and this will lead the Company to consider all strategic alternatives, including restructuring its debt under the U.S. Bankruptcy Code," it said in a Securities and Exchange Commission filing.

The American chain said it is taking a number of actions to improve its financial position such as cost cutting, lowering capital expenditures, reducing its store footprint, including distribution centers, and seeking reductions in rental obligations with landlords.

Further actions include looking for additional debt or equity capital, reducing or delaying the company's business activities and selling assets.

"These measures may not be successful...We may not be successful in implementing our transformative plan, and we are considering all strategic alternatives," it said in the filing.

After the announcement, the company's stock price plummeted to $2.10 per share around 3.11 p.m. EDT for a massive 35% loss after closing the previous session at $3.24 a share.

Bed Bath & Beyond warned on Jan. 5 that it was running out of cash to cover expenses and was considering bankruptcy. Its stock price dove almost 30% that day and another 22.5% the following day.