Business

Bed Bath and Beyond will share its turnaround strategy Wednesday as it struggles with slowing sales.
Investors want to hear Bed Bath’s plans to replenish its cash coffers to pay suppliers and take care of other expenses.
The home goods retailer may also provide updates on its push into private labels and efforts to win back customers.

A pedestrian walks by a Bed Bath and Beyond store on November 04, 2021 in Larkspur, California.
Justin Sullivan | Getty Images

1. A potential cash infusion

A key part of the announcement will be clarity around how Bed Bath plans to replenish its cash coffers to pay suppliers, take care of other expenses and keep investing in the business.
Bed Bath & Beyond’s net loss widened in the most recent quarter as sales slowed and the company ended May with about $100 million in cash, down from $1.1 billion a year ago.

As shares of the retailer were swept into a meme-fueled run-up in early August, the company said it was working with financial advisors and lenders to strengthen its balance sheet.
The retailer has not shared details about how it would accomplish that, but The Wall Street Journal reported last week that the company and asset manager Sixth Street Partners are nearing final terms on a loan of nearly $400 million. Sixth Street and Bed Bath did not respond to CNBC’s requests for comment.
Bed Bath’s cash crunch could worsen if the company did not adequately prepare to take advantage of the busy back-to-school shopping season, said David Silverman, a retail senior director at Fitch Ratings.
“Your liquidity position can get strained as you move through the year for a seasonally oriented retailer because you’re building working capital,” he said.
If Bed Bath secures extra cash ahead of the holiday season, it can put off questions about its financial stability and focus on fixing its business, said Seth Basham, an analyst for Wedbush Securities.
“Then it’s whether or not the customer comes back to them,” he said.

2. Luring shoppers back

Aside from fixing its financials, Bed Bath needs to convince consumers to give it another shot.
Shoppers can easily buy household items like towels and kitchen gadgets at places like Amazon and Target. In almost every category that Bed Bath sells, “there’s someone else in the market that does it better,” said Neil Saunders, managing director of GlobalData, a retail consulting company.
“The problem I have with Bed Bath and Beyond — and I think a lot of customers have with it — is that it feels like ‘Why would I go there?'” he said.
Headlines about its dire financial state could also turn off customers, said Harry Kraemer, professor of management and strategy at Northwestern University’s Kellogg School of Management.
“Do I want to buy a gift card for my relatives when the store may not be there a year from now?” he said.
For now, Bed Bath may want to turn to its tried-and-true strategy of giving away tons of 20% off coupons. Discounts may be the quickest way to drum up store traffic, particularly as shoppers feel pinched by inflation, said Wedbush’s Basham.
But over the long term, Bed Bath needs to think of a smarter way to stand out, said Steve Dennis, a retail consultant and former Sears executive. Other troubled retailers have found a way forward: Best Buy added services like Geek Squad as sales of merchandise like CDs and DVDs faded away, while Petco and Petsmart launched private brands and added vet care, so they didn’t just compete on pet food prices.
Dennis warned that struggling retailers can dig themselves deeper into trouble by shrinking store footprints or reducing staffing to cut costs. That could lead to less convenience and poorer customer service, driving shoppers away.
“It always worries me when companies get to this point because the things they can do that are easy usually make things worse,” he said. “You look like you’re making progress, but you end up cutting into the muscle sometimes.”

3. The merchandise riddle

Bed Bath and its rivals sell many of the same national brands, such as KitchenAid, Nespresso and Mikasa. To differentiate itself, Bed Bath went head to head with competitors like Amazon and Macy’s on price.
Under Tritton, its former CEO, the retailer took a new merchandising approach. Starting in spring 2021, it launched nine private label brands that could only be found at its stores and website. Store displays prominently featured the exclusive but lesser known private labels, pushing out the national brands that many shoppers sought.
The strategy has faced scrutiny as Bed Bath’s sales have declined. Same-store sales were down by 12% and 24% in the company’s two most recent quarters compared with the same year-ago periods.
It is unclear what will happen with Bed Bath’s collection of private label brands. The company has discontinued at least one of them: Wild Sage, a whimsical line designed with younger customers and dorm room decor in mind.
On a call with investors in June, Interim CEO Sue Gove said a portfolio of private brands “has a place in our assortment” and held up Simply Essential as a success story. That line is made up of low-priced everyday items such as kitchen utensils and sheets sets.

4. Supply chain fixes

Like many other retailers, Bed Bath struggled with its supply chain during the pandemic as ports got congested and shopping patterns shifted. But it has also had company-specific problems.
During the holiday quarter, the retailer said it missed out on about $175 million in sales because of being out of stock. Then more recently, it was stuck with piles of excess inventory it couldn’t sell. Inventory was up about 15% year over year at the end of May.
GlobalData’s Saunders said he has noticed lopsided inventory during store visits. In some categories, items are piled nearly to the rafters. In others, there is no stock.
“It doesn’t matter how great the products are or how nice they are or how much people want to buy them,” he said. “If you can’t get them into stores to sell, it’s not going to work.”
What’s more, Bed Bath is competing with rivals that are trying to get rid of unwanted merchandise. Walmart and Target both cut their profit outlooks because they will need to discount heavily to sell bloated inventories, including small kitchen appliances and other home goods.

5. ‘Bye bye’ Baby?

Earlier this year, Bed Bath’s baby goods brand appeared to be on the auction block.
A potential sale or spinoff of Buybuy Baby gained traction in the spring, when Bed Bath agreed to explore strategic options for the banner as part of a truce with Cohen.
Already, Bed Bath has sold off pieces of its business, including Christmas Tree Shops, Cost Plus World Market and One Kings Lane. Now it needs to raise more cash, but it may have missed the window to sell Buybuy Baby.
Bankers say deals in the retail industry have slowed to a near halt with so much uncertainty around consumer behavior amid high inflation. In June, Kohl’s terminated talks to sell its business, citing a deteriorating retail environment and tough backdrop for pulling together financing. Walgreens also scrapped plans to sell its U.K.-based Boots business because of changes in the global market.
“Inflation shot up, businesses’ profitability started to get tighter [and] boards were trying to figure out which way is up,” said Michael Kollender, head of consumer and retail investment banking at Stifel.
But if a company is struggling enough, it’s going to need to strike some sort of deal, said Kollender. If it’s not divesting part of the company, he said it might be a restructuring.
If Bed Bath does find a buyer for BuyBuy Baby, however, it risks losing one of its bright spots. Saunders of GlobalData said the baby goods business tends to be steady, even during tougher economic times.

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The war in Ukraine has “put a lot of fuel on an already burning fire” as food prices continue to rise, said Arif Husain at the United Nations World Food Programme.
In its worst-case scenario, the U.N. estimates global food prices could jump another 8.5% by 2027. 
Fertilizer prices are also rising, contributing to higher food prices as costs are passed onto consumers.

Food prices remain stubbornly high as Russia’s war in Ukraine drags on, exacerbating existing pressure from supply chain disruptions and climate change.
The war has “put a lot of fuel on an already burning fire,” said Arif Husain, chief economist at the United Nations World Food Programme.

Ukraine is a major producer of commodities such as wheat, corn and sunflower oil. Although exports globally have been restricted due to Russia’s invasion, Husain said that the global food crisis is not driven by the availability of food, but surging prices.
“This crisis is about affordability, meaning there is food available, but the prices are really high” he said on CNBC’s “Capital Connection” on Monday. 
According to figures from the U.N. Food and Agriculture Organization, global food prices in July were 13% higher than a year ago. And prices could keep rising. In its worst-case scenario, the U.N. estimates global food prices could jump another 8.5% by 2027. 

Fertilizer prices are also rising, contributing to higher food prices as costs are passed onto consumers. Prices jumped after Russia — which accounts for around 14% of global fertilizer exports — limited exports. That in turn has dented crop yields.
That, combined with high energy prices and supply chain disruptions, will affect the World Bank’s ability to respond to the increase in food production over the next two years, said Mari Pangestu, managing director of development policy and partnerships at the World Bank. All that uncertainty could keep prices high beyond 2024, she said.

While the U.N.’s Husain argued the current crisis mostly stems from high prices and affordability issues, he said it could turn into a food availability crisis if the fertilizer crunch is not resolved.
The U.N. estimates the number of people in “hunger emergencies,” which it defines as one step away from famine, has jumped from 135 million in 2019 to 345 million, Husain said.

Heatwave in China  

Extreme weather and climate change are also exacerbating conditions contributing to global food insecurity. China, the world’s biggest wheat producer, has suffered multiple weather disruptions, from flash floods to severe droughts.  

Earlier this month, the country issued its first drought emergency as central and southern provinces suffered weeks of extreme heat, with temperatures in dozens of cities exceeding 40 degrees Celsius, or 104 degrees Fahrenheit. The heat wave has hindered crop production and jeopardized livestock. 
“Rice production is certainly very vulnerable to changes in weather temperature,” said Bruno Carrasco, director general of the sustainable development and climate change department at the Asian Development Bank. “When we look at the overall supply of food production in Asia-Pacific, approximately 60% of that is rain-fed farming.”
“We are very concerned given the overall weather events that we’ve seen and observed over the course of the year,” he added. More

Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer said Monday that veteran chartist Larry Williams sees the potential for Wall Street to finish out the year on a relatively solid note.
The “Mad Money” host dissected a handful of historical analogues that Williams believes offer clues on where the Dow Jones Industrial Average can go from here.

Longtime technical analyst Larry Williams sees the potential for Wall Street to finish out the year on a relatively solid note, CNBC’s Jim Cramer said Monday.
Williams put the Dow Jones Industrial Average’s 2022 performance in comparison with the blue-chip index’s performance in previous years to see if history might offer clues for the final four months of trading. The technician found the years 2014, 1962 and 1891 all presented some similarities to this year, Cramer said.

“These historical analogues tend to be pretty hit or miss, but when you look at the years with the closest fit to 2022, the charts — as interpreted by Larry Williams — suggest that the rest of the year’s looking pretty darn good,” the “Mad Money” host said. “Despite what we went through last week, he’s a buyer, not a seller.”
Cramer presented a chart of Williams’ work that overlays the Dow’s 2022 action alongside its 1962 trajectory.

Arrows pointing outwards

Technical analyst Larry Williams compares the Dow’s performance this year to its performance in 1962.
“Mad Money with Jim Cramer”

They “might as well be joined at the hip,” Cramer said. “The 1962 analogy says we could have a very nice run in November and December after some sideways action” in September and October turbulence, he said.
For an in-depth look at Larry Williams’ work on historic analogues, watch the full video of Cramer’s explanation below:

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Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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PepsiCo: “PepsiCo is in the [CNBC Investing Club bullpen]. We think a lot of it. I just wish the stock would come down. It doesn’t seem to want to come down at all, but it is well run and terrific.”

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Kelly Services: “Very well-run company. Right now, with people just feeling it’s easy to get a job, you don’t need them. That’s why that stock has been such a dog. You never know, but I am not a buyer of it right here, though.”

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Uranium Energy: “This is Canadian. The problem with this, this group is so red hot, that it is too sizzling for me. I am going to take a pass. I know the ETF is up 7% just today. That is too dangerous for me. I’m going to say no for now.”

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Mirum Pharmaceuticals: “I’m afraid they’re losing too much money for me to recommend. You know what, I feel so bad about that because when they’re up like that and they’re doing some great work in that particular disease, particularly with the liver, I want to recommend it. But I just am afraid to because it’s had such a big move.”

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Karuna Therapeutics: “We were believers. We were believers. Now, it does not fit my thesis about what works here, but we found ourselves very compelled and thought it was an illness that, if they could do anything for it, it would be great. So, speculative? Yes. It’s a speculative situation.”

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Cloudflare: “I think that [CEO] Matthew Prince is fantastic. The stock is low because they’re making just very little money. I’m willing to bet with Prince. I think that that’s one that you can buy and put away. He does a good job.”

Plug Power: “It’s OK. Andy Marsh was on again today. Andy Marsh, I think he must be a regular on the network because I see quite a bit of him. He needs something that is very elusive that’s it’s called earnings. If gets them, the stock can still go higher.”

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Monday – Friday, 6:00 – 7:00 PM ET

Shareholders of money-losing companies should steel themselves for more downside, CNBC’s Jim Cramer said Monday.
Federal Reserve Chair Jerome Powell gave that notice in his Jackson Hole speech, showing investors that he “means business” in the fight against inflation, the “Mad Money” host said.

CNBC’s Jim Cramer said Monday that investors whose portfolios include money-losing companies should steel themselves for more downside in light of Federal Reserve Chair Jerome Powell’s speech in Jackson Hole last week.
“Until Friday, I wasn’t sure if Powell had the guts to pressure the economy with relentless rate hikes. But simply by signaling that he won’t stop, as he did Friday, Powell may have a chilling effect on every bank that fears making bad loans, especially to businesses that can’t tap the public markets — meaning pretty much all financial institutions worried about all loans,” the “Mad Money” host said.

In a closely anticipated address Friday, the top U.S. central banker warned the American economy could encounter “some pain” as the Fed remains committed to stamping out the hottest inflation in four decades. Stocks plunged Friday as investors digested Powell’s brief but hawkish speech, and the sell-off continued Monday.
While some on Wall Street had hopes the Fed could afford to take a less aggressive posture in the coming months, Cramer said investors now know that “Powell means business.” Ultimately, Cramer said he thinks investors want inflation to subside, adding that certain pockets of the market will feel the Fed’s action more directly.
“If you have stocks of companies that have great balance sheets and plenty of cash … you’ll do just fine,” Cramer said, noting that investors in dividend-paying equities should do well, too. “But if you own the stocks of companies that are losing money? Powell’s message to you is to start selling now before he closes the door on their funding entirely.”

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.

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Digital World Acquisition Corp. is trying to extend the deadline to complete its merger with former President Donald Trump’s Trump Media and Technology Group.
Shares of DWAC fell Monday as shareholders considered the delay and Trump contends with several serious legal issues.
Trump Media is also reportedly facing severe financial problems.

The TRUTH Social website is seen on a mobile device with an image of former US president Donald Trump in the background in this photo illustration in Warsaw, Poland on 23 February, 2022.
Nurphoto | Getty Images

Digital World Acquisition Corporation, the company that plans to take Trump Media and Technology Group public, saw its stock price slide Monday as shareholders consider delaying the merger and the former president contends with a host of legal problems.
A Monday filing from DWAC said that voting for a yearlong delay would open Tuesday. The current deadline to take Trump Media public is Sept. 8. DWAC has warned that it may be forced to liquidate if the deadline is not extended. A shareholder meeting is scheduled for Sept. 6.

Shares of DWAC closed down nearly 8% at $25.32, off 16% this month and significantly below their 2022 peak of about $97.
Representatives for DWAC didn’t immediately return a request for comment.
Trump Media and Technology Group controls Truth Social, which is reportedly facing severe financial difficulties. A merger with DWAC would give Trump’s company access to billions of dollars in publicly traded stock markets.
The former president created Truth Social to compete with Twitter after he was banned from the platform over his tweets regarding the Jan. 6, 2021, U.S. Capitol riot. On that day, hundreds of Trump’s supporters stormed the building in a bid to block Congress from confirming Joe Biden’s victory in the 2020 presidential election.
Trump has been at the center of a criminal investigation into the allegedly improper removal of sensitive and secret documents from the White House. FBI agents searched the former president’s Mar-a-Lago home earlier this month. An affidavit justifying the search said there was “probable cause to believe that evidence of obstruction will be found” at his home.

DWAC warned last week that damage to the former president’s dwindling popularity could hurt the deal. Earlier this month, Trump Media’s trademark application for “TRUTHSOCIAL” was denied by the U.S. Patent and Trademark Office on the grounds that the title was confusingly similar to existing registered marks.
The Securities and Exchange Commission as well as the Justice Department have been investigating the proposed merger between DWAC and Trump Media. Federal prosecutors have subpoenaed Trump Media as it probes possible undisclosed conversations between the SPAC and Trump Media employees that may have violated securities regulations.
The former president is dealing with multiple investigations, including a probe into possible interference into Georgia’s presidential election process, and his role in the events of Jan. 6, 2021.

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A massive ice sheet in Greenland is set to raise global sea levels by nearly a foot by 2100, in a melting event driven by human-caused climate change, according to a study published on Monday.
The findings in the Journal Nature Climate Change show that 3.3% of Greenland’s ice sheet will melt, the equivalent of 110 trillion tons of ice.
The study’s forecast of 10 inches of sea level rise is more than twice as much sea level rise as researchers have previously calculated from the melting of Greenland’s ice sheet.

Icebergs float in the Baffin Bay near Pituffik, Greenland on July 15, 2022 as captured from the ground during a NASA mission along with University of Texas scientists to measure melting Arctic sea ice. New observations from ICESAT-2 show remarkable Arctic Sea ice thinning in just three years.
Kerem Yucel | AFP | Getty Images

A massive ice sheet in Greenland is set to raise global sea levels by nearly a foot by the end of this century, in a melting event driven by human-caused climate change, according to a study published on Monday.
The findings in the Journal Nature Climate Change show that 3.3% of Greenland’s ice sheet will melt, which is equivalent to 110 trillion metric tons of ice. The ice loss will prompt about 10 inches of sea level rise between now and 2100.

Scientists warned the melting is inevitable even if the world immediately stops emitting planet-warming greenhouse gases. The study’s forecast of a minimum of 10 inches of sea level rise is more than twice as much sea level rise as researchers have previously predicted from the melting of Greenland’s ice sheet.
It is the second biggest ice sheet in the world behind the one in the Antarctic and covers 80% of the island. Previous research has suggested that if all of the ice sheet were to melt, global sea levels could rise by as much as 23 feet.

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Scientists located in Belgium, Denmark, Finland, Norway, the Netherlands, Switzerland and the U.S. conducted the study by using satellite measurements of ice losses from Greenland and the shape of the ice cap between 2000 and 2019.

The researchers assessed the ratio of replenishment from snowfall to loss from melting ice in Greenland, and concluded that 3.3% of Greenland’s total ice volume will melt by the end of the century, no matter how quickly the world curbs carbon emissions.
Climate change from the burning of fossil fuels has led to longer summers in Greenland and accelerated the retreat of glaciers and the island country’s ice cap.
A one-foot rise in global sea levels would have major consequences for coastal communities, as sea level rise threatens to displace almost 200 million people by the end of the century. In the U.S., coastal residents represent 40% of the total U.S. population and $7.9 trillion in gross domestic product, according to the National Oceanic and Atmospheric Administration.

An iceberg lies off Nuuk during low tide, Greenland, September 7, 2021.
Hannibal Hanschke | Reuters

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When chief executives ring the closing bell at the Nasdaq stock exchange in New York, it is usually because their firm has just gone public. When Adam Selipsky did so on June 27th, he was celebrating a tie-up with the bourse. He is the boss of Amazon Web Services (aws), the tech giant’s cloud-computing arm, and the deal is part of the exchange’s shift of its stockmarkets to aws’s More