(Reuters) – Bed Bath & Beyond said on Friday it was seeking shareholder approval for a reverse stock split, sending shares of the struggling retailer 13% lower in extended trading.
The company plans to hold a special meeting on March 27 to determine the split in a 1-to-5 to 1-to-10 ratio, with the final ratio determined by the board.
The news comes less than two weeks after it was announced that the stock would be removed from the small-cap S&P 600 index, following a nearly 60% plunge this year as the retailer battles to stave off bankruptcy.
“The board believes that the reverse stock split is likely to result in a higher trading price per share, which is intended to increase investor interest in the company,” Bed Bath & Beyond said in a filing.
CEO Sue Gove said the move would allow the company to continue to rebuild liquidity to execute on its turnaround plans and better position it financially.
In February, the company said it planned to raise about $1 billion through an offering of preferred stock and warrants. So far, it has raised $360 million of the planned total.
Bed Bath & Beyond gained popularity in the 1990s as a shopping destination for couples making wedding registries and planning new babies, but demand waned as the merchandising strategy to sell more store-brand products failed.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Devika Syamnath)