Bed Bath & Beyond stock: 'It's hard to make investors feel good about it,' Macco CEO says
Macco CEO Drew McManigle joins Yahoo Finance Live to discuss Bed Bath & Beyond's struggles and what it needs to do to turn the business around.
Video Transcript
SEANA SMITH: All right. Well, Bed Bath & Beyond taking a huge hit today. Shares of it just over, just around 20% after the struggling retailer laid out plans to issue more stock, close 150 stores, lay off 20% of its staff, and also securing $500 million in new financing, all in an effort to stem the bleeding. Well, let's talk about where the company goes from here, and for that, we want to bring in Drew McManigle. He's a CEO of Macco.
Drew, it's great to see you. I know you have worked with hundreds of companies that have underperformed going through restructuring efforts or reorganization efforts. So this is a question everyone wants to know the answer to. What does Bed Bath & Beyond need to do to turn things around from here?
DREW MCMANIGLE: Well, I've been in this business for 35 years in restructuring and turnarounds, and they're doing it, unfortunately, it's just a little bit too little too late, if you will. They should have started this process last year if they'd been paying attention to the post-pandemic numbers. If you're even looking now,
Best Buy's numbers are down. Consumers are beginning to slow down if not stop-- stopping buying completely. And this is going to affect all the retailers, especially those with big box stores in multiple locations across the country.
- It feels like rearranging the deck chairs on the Titanic. Is there an example, when you look at past situations, that someone did emerge from this situation and lived to be a stronger, better company?
DREW MCMANIGLE: It's hard to say because if you look at Toys R Us as an example, Toys R Us went through what was ostensibly a successful Chapter 11 and they've rebounded now. So they're kind of back and making a rebound. So it's possible.
But in the retail front, you had so many examples that didn't work. Sears is a classic example. And again, what we typically see in restructuring situations where you're coming to the party late. I'm not going to be one bit surprised if the Chapter 11 petitions haven't already been drafted or are just waiting for signature.
I'm also not convinced that this $500 million financing is going to be enough cash. And I'm not convinced either, based on our experience, that it's going to make any difference in the long-term whether they file a Chapter 11 proceeding or not, because I quite frankly think that's the only way they're going to be able to successfully restructure $1.3 billion in debt and get out from underneath a lot of real estate.