Based on the latest guidance from federal, state and local government and health authorities, Bed Bath & Beyond is extending the temporary closure of its retail stores until at least May 2, 2020.
On March 23, the company temporarily closed all its retail banner stores across the U.S. and Canada, other than buybuy Baby and Harmon Face Values stores, until April 3. Those stores will continue to provide essential infant, health and personal care items in-store.
Bed Bath & Beyond is also implementing additional cost reductions, including a furlough of the majority of store associates and a portion of corporate associates until at least May 2.
The company is providing impacted store associates with applicable pay and benefits until April 3. Corporate associates who have been impacted will be provided with pay and benefits through April 18. During the period in which furloughed associates are not paid, the company will pay 100% of the cost of health care premiums for all these associates who currently participate in the company’s health plan, until further notice. Furloughed associates will also be able to apply for unemployment benefits, if eligible.
Mark Tritton, president and CEO, Bed Bath & Beyond, said, “The health and safety of our customers and associates remain our number one priority, as we do what we can to slow the spread of COVID-19. This is a time of unprecedented disruption to our industry. We do not make these decisions lightly but, while the vast majority of our stores remain closed, we must now balance our ability to provide jobs and financial support for our associates in the short, medium and long-term, as well as prioritizing investments that will strengthen our business. We are therefore making the difficult decision today to place many of our associate team members on temporary leave, while our stores remain temporarily closed.”
The company will also temporarily reduce salaries by 30% across the executive team, including president and CEO, Mark Tritton. At the same time, the chairman of the board and all other independent directors will forgo 30% of their quarterly cash compensation.
To further strengthen its financial flexibility, Bed Bath & Beyond is electing to draw down the remaining available funds, $236 million, from its revolving credit agreement, in an abundance of caution and as a proactive measure; executing a substantial reduction in expenses, including managing to lower inventory levels and extending payment terms for goods and services; prioritizing approximately $250 million in essential capital expenditures to drive strategic growth plans, including investments in digital and buy online pick up in store; deferring approximately $150 million of other planned capital expenditures; and postponing, until further notice, its plans for share repurchases, dividends and debt reduction.
Tritton added, “We are taking decisive action across our business to proactively manage the unprecedented financial and operational impacts of COVID-19, while we prioritize the investments that will allow us to rebuild and grow. The business contingency plans that we developed for this situation have been implemented, and we will continue to adjust as needed. At the same time, we are working to ensure we are ready to resume and ramp-up our operations as conditions allow.”