Friday, January 13, 2023

Bed Bath & Beyond facing bankruptcy, a tale of the Retail Apocalypse for Friday the 13th

It's Friday the 13th! This year, instead of exploring the psychology and history of the day or spooky theme park attractions, I'm examining a real-life tale of woe, Bed Bath & Beyond’s Potential Bankruptcy, Explained, uploaded by the Wall Street Journal today.

Bed Bath & Beyond recently warned it may be filing for bankruptcy in just a few weeks. WSJ’s Suzanne Kapner explains the roller coaster of events over the past six months that led to this low point for the company.
The Wall Street Journal examined the longer-term history of the chain in July, when it asked Bed Bath & Beyond Is in Crisis Mode. What Went Wrong?

After years of declining sales, Bed Bath & Beyond is facing an existential crisis. WSJ’s Suzanne Kapner explains why the company has fallen on hard times and looks forward to what’s next for the veteran retailer.
None of this comes as a surprise to me, as I posted CNBC warns that Bed Bath & Beyond is 'facing extinction,' a tale of the Retail Apocalypse nearly four years ago. I was fairly sanguine then, writing "the chain is facing a crisis, but it's not in imminent danger of going out of business," but became more concerned in 2020, when I wrote "I'm not as calm about the fate of the chain now, if only because 100,000 dead and 40 million unemployed in the U.S. has made the economic environment much more precarious for retailers other than daily essentials such as food and medicine, which I shopped for yesterday and picked up without ever entering the store." I'm only surprised it took me this long to return to the topic.

Follow over the jump for more on Bed Bath & Beyond from CNBC and Yahoo Finance.

CNBC Television explained some of the reasons why I didn't blog about Bed Bath & Beyond between May 2020 and today in What Bed Bath and Beyond's bankruptcy warning could mean for meme stocks.

The traders discuss what a potential bankruptcy of BBBY could mean for the other meme stocks. With CNBC's Sara Eison and the Fast Money traders, Tim Seymour, Karen Finerman, Dan Nathan and Guy Adami.
This is a surprising example of "everything is connected to everything else," in this case GameStop and the pandemic paradoxically keeping the company afloat. First, CNBC Tim Seymour, on the viewers' left, implied that the loss of sports and an influx of money helped turn sports gamblers into day traders and aficianados of meme stocks, pumping money into the stock. Then, Ryan Cohen of GameStop got involved, helped push up the stock, then dumped his stake. The commenters on the Wall Street Journal video pointed out that this was a missing part of the story. This is why I turned to CNBC to fill in this gap. It's good to have a diversity of sources.

Despite the CNBC's panel hoping that this would help crush meme stocks and especially the meme stock traders, Yahoo Finance reported Bed Bath & Beyond stock soars amid ongoing meme stock rally Wednesday.

The current meme stock rally has Bed Bath & Beyond shares surging amid bankruptcy speculation while Party City's stock slides lower.
When the host called this a "nonsense rally," he wasn't wrong, but he wasn't entirely right, either. This is not a rational play; it's an irrational act of hope and defiance. Viewed that way, these trades make some sense, even if they look like they will lose dollars.

I close with Yahoo Finance examining The retailers ‘most likely to win’ if Bed Bath & Beyond goes bankrupt: Analyst.

Bernstein Analyst Aneesha Sherman joins Yahoo Finance Live anchor Julie Hyman and Brian Sozzi to discuss the ongoing uncertainty surrounding Bed Bath & Beyond, a possible bankruptcy filing, the apparel industry, and the outlook for Bed Bath & Beyond.
Some of the likely winners, Target, Wayfair, and HomeGoods, which has the same parent company as Marshalls and T.J. Maxx, are the same companies I mentioned three years ago as benefiting from the Pier 1 Imports bankruptcy. The more things change, the more they stay the same.

Here's to wishing my readers better luck today than Bed Bath & Beyond is experiencing during the Retail 'Apocalypse. As I told my students yesterday, don't walk under any ladders, break any mirrors, or open an umbrella indoors!

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