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Inventory’s the Albatross for Bed Bath & Beyond

As Bed Bath & Beyond hovers on the brink of bankruptcy—admitting this week in a Securities Exchange Commission filing that it doesn’t have the cash to cover its debts—the retailer’s inventory continues to dwindle.

According to a report from e-commerce analytics firm DataWeave, Bed Bath & Beyond’s inventory availability dipped below 50 percent in January, dropping from 53 percent in December to 48 percent this month.

DataWeave compared inventory levels at Bed Bath & Beyond to competitors such as Home Depot, Lowe’s, Kohl’s and Wayfair, which all had levels of more than 60 percent in January.

Breaking it down by category, Bed Bath & Beyond only held 32 percent inventory availability for lighting, compared to 75 percent at Home Depot, 66 percent at Kohl’s, 73 percent at Lowe’s and 80 percent at Wayfair. For bathroom, the retailer only had 33 percent availability, compared to more than 60 percent at its competitors. Bed Bath & Beyond’s kitchen category was 37 percent stocked while its competitors ranged from 53 to 64 percent. In bedding, the retailer was slightly less than half-stocked, while its competitors all came in at more than 60 percent stocked. The only category where Bed Bath & Beyond maintained inventory levels, home and decor, came in at 60 percent inventory.

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During its earnings call earlier this month, CEO Sue Gove blamed the company’s poor showing in the third quarter of fiscal 2022—a 33 percent net sales drop and a 32 percent comp sales decline—partially on reduced inventory during the holiday shopping season. Several of Bed Bath & Beyond’s vendors halted or delayed shipments due to unpaid bills.

“Following some of the micro and macro challenges we and the sector faced at the beginning of the quarter, we experienced an acceleration in vendor payment terms and credit line restraints,” Gove said at the time. “This led to lower receipts and therefore lower in-stock levels in the 70 percent range, which hampered our sales in an already competitive environment.”

Bed Bath & Beyond also added to its bankruptcy preparation team this week by naming restructuring specialist Carol Flaton to its board. Flaton, who has previously served as a managing director of AlixPartners, specializes in restructuring and turnarounds. Flaton will receive compensation equal to $30,000 per month payable in cash in advance, with the payments prorated based on the actual term of her service, according to Bed Bath & Beyond’s notice to the SEC.