Bed Bath & Beyond: Reevaluating Capital Structure for Sustained Shareholder Value

Abstract

This paper focus on the how Bed Bath & Beyond (BBBY), a key player in the home goods retailing industry, optimize its capital structure to solve the inefficiency of its cash-heavy, without debt strategy and rebuild the positive relationship between capital structure and shareholder value. The main goal is providing feasible measures for BBBY and similar retail companies that facing parallel financial situation with long-term shareholder value growth. The study adopts a case-focused research approach. Firstly, analyze BBBY’s business model and current capital structure characteristics to identify its issues; then evaluate the potential of strategic adjustments; and use cross-industry corporate cases to illustrate common challenges in capital structure management. Key research results include identifying the inefficiency of BBBY’s conservative capital structure and verifying that targeted adjustments can enhance indicators like EPS and reverse return dilution. The research concludes that BBBY’s capital structure requires dynamic optimization based on market conditions, and similar retail enterprises should balance liquidity with capital efficiency—offer practical references for managers in retail and consumer-facing sectors to improve capital structure decision-making.