The company had carried relatively little debt to that point, and it put Bed Bath & Beyond on a path toward a debt load that ultimately proved unaffordable.Ĭustomers shop in a Bed Bath & Beyond store on in Miami, Florida, on Monday, the day after it it filed for bankruptcy. “The company’s stewardship of their capital failed,” said Declan Gargan, retail director and credit analyst who follows Bed Bath & Beyond for S&P Global Ratings.īed Bath & Beyond grew particularly active share repurchases in July 2014, taking on $2 billion in debt to finance share buybacks, as it started to face pressure from activist shareholders to improve the stock’s performance. It left the company unable to buy the inventory required to create the sales it needed to reverse losses. The $11.8 billion Bed Bath & Beyond spent on its own stock since 2004 comes to more than twice the $5.2 billion in debt it had on its books in its most recent SEC filing, a debt load that proved crushing for the company. Instead, it fueled a desperate and ultimately failed effort to support its stock price.
But for a cash-starved business that announced it would likely be forced to close all of its stores if it couldn’t find an 11th-hour savior to buy it, the money could have been better spent. The company’s repurchase program wasn’t unique. Among the most consequential was the $11.8 billion it has spent since 2004 to buy back its own shares.
Bed Bath & Beyond made plenty of mistakes that led to this week’s bankruptcy filing.
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