Mattress Bathtub & Past broadcasts reverse inventory break up plan, shares drop

(Reuters) – Mattress Bathtub & Past (NASDAQ:) stated on Friday it was searching for shareholder approval for a reverse inventory break up, sending the struggling retailer’s shares 13% decrease in prolonged buying and selling.

The corporate plans to carry a particular assembly on March 27 to find out the break up at a ratio within the vary of 1-for-5 to 1-for-10, with the ultimate ratio to be determined by the board.

The information comes lower than two weeks after it was introduced that the inventory could be faraway from the small-cap S&P 600 index, following a close to 60% plunge this yr because the retailer fights to stave off chapter.

“The board believes that the reverse inventory break up will probably end in a better per-share buying and selling worth, which is meant to generate better investor curiosity within the firm,” Mattress Bathtub & Past stated in a regulatory submitting.

CEO Sue Gove stated the transfer would allow the corporate to proceed rebuilding liquidity to execute its turnaround plans and higher place it financially.

In February, the corporate stated it was planning to boost some $1 billion by means of an providing of most popular inventory and warrants. To date, it has raised $360 million out of the deliberate complete.

Mattress Bathtub & Past shot to recognition within the Nineties as a go-to buying vacation spot for {couples} making marriage ceremony registries and planning for brand new infants, but it surely has seen demand dwindle as its merchandising technique to promote extra store-branded merchandise flopped.