New Credit Facility Supports Bed Bath & Beyond Operations

Bed Bath & Beyond has strengthened its liquidity position by executing an $850 million three-year secured asset-based revolving credit facility, or ABL facility, with a syndicate of banks, while also providing additional information on its store reopening process.

The ABL facility expires in June 2023 and replaces Bed Bath & Beyond’s existing unsecured revolving credit facility allowing for borrowings up to $250 million.

The company already had proactively taken steps to strengthen its financial position and liquidity as it amended various operations and procedures to deal with the COVID-19 pandemic. The company noted that it took steps to appropriately control expenses, working capital and capital expenditures as it drew down the remaining available funds from its existing unsecured revolving credit facility. It also furloughed the majority of store and some corporate employees, extended payment terms for goods and services as well as rent, suspended plans for share repurchases, dividend payments and debt reduction, and postponed $150 million of planned capital expenditures.

Gustavo Arnal, Bed Bath & Beyond chief financial officer and treasurer, said, “An important focus as we transform our company is to ensure liquidity and to improve cash flow generation. The company went into the COVID-19 pandemic with a healthy cash position. This new ABL facility in combination with actions being taken to drive cash flow are enabling a more robust balance sheet.”

In the coronavirus crisis and despite store closures, Bed Bath & Beyond continued serving customers by leveraging its omnichannel network and accelerating the introduction of buy online pickup in store and contactless curbside pickup services. As May ended, the company began taking measured steps to reopen store locations, including the launch of a store safety plan to help ensure customers could shop its stores confidently.

The pace of store reopenings has accelerated since the company began inviting shoppers back to its stores, in line with changing local and state regulations, market data and the wider retail landscape. The company expects approximately 95% of its total store fleet to reopen by June 26 and anticipates just about all stores returning to full operation by the end of July, subject to state and local regulations.

Mark Tritton, Bed Bath & Beyond president and CEO said, “We have been delighted to welcome our customers back as we reopened hundreds of stores in the last few weeks. At the same time, we are pleased with the response from our loyal customers to our new BOPIS and contactless curbside pickup shopping experience. These are important, targeted investments that strengthen our service offering and competitive position for the long term. While the impact of the COVID-19 situation has been felt across our business, we have taken measured, purposeful steps to maintain our financial flexibility. We ended our fiscal 2020 first quarter with approximately $1.2 billion in cash and investments, and we now have access to additional liquidity through our new ABL facility.”