Bed Bath & Beyond Bolsters Liquidity With $850M Credit Facility

To help bolster its liquidity standing, Bed Bath & Beyond Inc. has put into place a three-year secured asset-based revolving credit facility with a group of financial institutions (FIs). The ABL facility, which takes the place of the retailer’s existing unsecured revolving credit facility, expires in June of 2023, according to a statement.

The retailer said it has put measures into place to make its financial position and liquidity more formidable amid the challenge of the coronavirus pandemic. It has put most of its store workers and a share of its corporate staffers on leave, has halted plans for share repurchases and has tightly managed expenses, capital expenditures and working capital, among other steps.

Chief Financial Officer and Treasurer Gustavo Arnal said in the announcement, “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 addition, Bed Bath & Beyond said it has quickly pivoted to meet the evolving needs of shoppers by harnessing its omnichannel network and speeding up the debut of buy online, pick up in store (BOPIS) as well as contactless curbside pickup. The retailer noted that the new offerings assisted in helping with the “significant increase in demand” from its digital channels as most stores remain shuttered.

The home goods store foresees that roughly 95 percent of its overall store footprint will open again by the end of this week, expects that almost all locations will reopen by July, “subject to state and local regulations.”

In separate news, Macy’s Inc. recently announced an offering of $1.1 billion in senior secured notes, set to come due in 2025, to help pay back borrowings under its current $1.5 billion credit facility. The retailer said the notes would be secured by a collection of real estate assets, including three iconic locations.