UNION, New Jersey: Bed Bath & Beyond reported a quarterly loss of $393 million after its sales plunged by over 30 percent, continuing losses that have led to warnings of potential bankruptcy.

After taking on financing worth $375 million in August and failing this month to convince bondholders to swap out their investments for new debt, last week Bed Bath & Beyond said it was exploring options, including bankruptcy.

In 2022, the company announced various cost-cutting measures, including closing 150 stores and laying off 20 percent of its corporate and supply chain staff.

Meanwhile, the company said this week that in order to reduce costs, it will lay off more employees.

“It is clear to us that ‘behind the scenes’ conversations are pointing in the direction of bankruptcy,” said In a note, Wells Fargo analyst Zachary Fadem, as quoted by Reuters.

Last week, Bed Bath & Beyond said it was working with outside advisers to explore options, but it did not say whether it would file for bankruptcy protection.

Bed Bath & Beyond did not meet its goals in changing its assortment, as it dealt with “credit line constraints” and vendors seeking quicker payments, said Chief Executive Sue Gove.

“This led to lower receipts and, therefore, lower in-stock levels, in the 70 percent range, which hampered our sales further in an already competitive environment,” she added.

Morningstar analyst Jaime Katz said she expects a Bed Bath & Beyond bankruptcy filing in the first half of 2023, highlighting “the unwillingness of lenders to participate in a debt swap,” as evidence creditors are unlikely to take on “incremental financial” risk, according to Reuters.