5 issues investors want addressed

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.

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…