Some Bed Bath & Beyond suppliers are limiting or completely halting shipments after the home improvement retailer defaulted on payments, according to people familiar with the matter, complicating the company’s scramble for liquidity.
Several companies that provide credit insurance or short-term financing for suppliers have withdrawn coverage for Bed Bath & Beyond, according to people familiar with the matter who spoke on the condition of anonymity to discuss private information. The New Jersey-based company did not immediately respond to a request for comment.
Shares in Bed Bath & Beyond fell by half this week after influential investor Ryan Cohen sold his stake in the company. The stock extended losses in after-hours trading Friday, falling 6.2% at 5:21 p.m. in New York.
The retailer has previously said it is working to optimize cash and inventory, and that order errors appear to have left it with a glut of merchandise that must be sold at reduced prices. Chief executive Mark Tritton stepped down in June and was replaced on an interim basis by board member Sue Gove.
A survey of suppliers by Pulse Ratings, an independent credit rating and consulting firm, found that Bed Bath & Beyond owed payments to all respondents, some of whom said they More than half of the receivables are overdue. Payments are delayed by up to 90 days, vendors said in an investigation seen by Bloomberg. Say. The survey did not identify respondents, and Pulse Ratings declined to comment on the report.
Supply chain disruptions and waning consumer confidence have caused many retailers to be overwhelmed with merchandise after they began struggling to build up scarce inventory.
According to its earnings report for the first quarter ended May 28, Bed Bath & Beyond’s inventory rose more than 12% in the last quarter from a year earlier, and sales fell.
Sign up for theFortune Features email list so you don’t miss our biggest features, exclusive interviews and investigation.