Lauren Leach: RETAIL Is Bed Bath & Beyond Going Through Temporary Turbulence or More Serious Challenges? – National Real Estate Investor
Lauren Leach was featured in National Real Estate Investor’s article titled “RETAIL Is Bed Bath & Beyond Going Through Temporary Turbulence or More Serious Challenges?”
“What I see is more than temporary turbulence; the company is facing serious trouble,” says Lauren Leach, director of real estate advisory services at consulting and advisory firm Conway MacKenzie. “Revenue for the company declined 7.3 percent year-over-year in second quarter. It is closing a total of 60 stores—which is up from the initial estimate of 40—and same-store sales have fallen two years in a row.”
“Furthermore, the company’s stock took a nosedive; it has lost 85 percent of its value in the past five years. That’s highly problematic,” Leach notes.
In the company’s most recent earnings call, Bed Bath & Beyond executives revealed they are evaluating several offers for sale-leaseback transactions, which is a strategy employed to quickly generate liquidity, according to Leach. “This implies the company has a need for cash and is taking steps to address it,” she says.
The initial potential proceeds estimate for sale-leaseback transactions is $50 million for approximately 4 million sq. ft. of retail and 500,000 sq. ft. of land.
“If executed, this will most certainly help, but the question remains whether $50 million alone will be enough, and if the timeframe associated to close all of the transactions will be outpaced by the company’s other looming issues,” Leach notes.