Bed Bath & Beyond's attempt to mount a financial turnaround appears to be unraveling, with the retailer once again warning that it may be forced to file for bankruptcy protection.

The Union, New Jersey-based company — parent of its namesake chain as well as Buy Buy Baby — on Thursday said it would be looking to sell $300 million in stock and that B. Riley Principal Capital would be providing it with additional capital as the company continues to struggle. Bed Bath & Beyond also announced it had terminated a fund-raising agreement that it struck in February with the hedge fund Hudson Bay Capital Management.

The future appeared cloudy for the company, which for a second time this year said if its initiatives fail it might have to seek relief in U.S. Bankruptcy Court. In other gloomy news on Thursday, Bed Bath & Beyond reported preliminary results for the quarter ending Feb. 25, saying that net sales were about $1.2 billion, down from $2.05 billion in the prior year, with comparable sales diving 40% to 50%.

The retailer has taken dramatic steps to try to rebound from a series of problems and missteps, issues that arose when prior management shifted Bed Bath & Beyond's merchandise mix to focus on private-label merchandise from national brands.

In the face of the pandemic, the retailer also encountered severe supply-chain snafus that also ended up hampering sales. In January Bed Bath & Beyond warned that it might have to file for bankruptcy protection, potentially leading to the liquidation of the company, because of its plummeting sales and burning through cash.

But then the company struck what appeared to be a life-saving deal with Hudson Bay, to secure over $1 billion from an equity offering. The retailer said it has now scuttled that pact, which raised $360 million to date. Hudson Bay didn't immediately respond to an email seeking comment.

In late January Bed Bath & Beyond said it was shutting down its Harmon beauty-goods chain and in February announced it was closing about 300 of its banner stores, dramatically downsizing its physical footprint. As part of the cutbacks, the retailer is laying off nearly 1,300 workers in New Jersey at its headquarters and three warehouses, a move that's prompted criticism from a New Jersey legislator.

"We are on pace to achieve our target of 360 top-performing Bed Bath & Beyond stores by the end of April, in addition to our existing 120 Buy Buy Baby stores," Susan Gove, the retailer's president and CEO, said Thursday in a statement. "In conjunction with our online business, these productive stores are pivotal to our omni-channel strategy and future profitability."

Bed Bath & Beyond is trying to sublease a warehouse at 11 Taft Road in Totowa, New Jersey, that used to service its now-defunct Harmon chain. The retailer is laying off 262 workers at that 282,000-square-foot facility "due to discontinuing the retail operations at one of the company's brands" meaning that "this distribution network will no longer be utilized," Bed Bath & Beyond told new labor officials.

JLL is handling the subleasing assignment, and in a marketing flier, it said the building will be available in June.

The timing of Bed Bath & Beyond's layoffs has drawn criticism from New Jersey state Sen. Joe Cryan, D-Union, who sponsored legislation that increases the advance notice employers have to give regarding mass layoffs and mandates severance be paid to those let go. That law takes effect April 10, and Bed Bath & Beyond's layoffs will be completed right before that date, which Cryan told CoStar News is "extremely frustrating."

Bed Bath & Beyond's actions and timing are aimed to avoid having to comply with the new law, according to Cryan. He said the retailer's lack of concern for employees who helped make it a success reflects a corporate culture that doesn't bode well for the company's future.

Cryan said he sponsored the new legislation in response to how he saw employees were treated when Wayne, New Jersey-based retailer Toy R Us liquidated and laid off thousands of workers in 2018. New Jersey Gov. Phil Murphy signed Cryan's bill into law in 2020, but its effective date was postponed for several years due to the pandemic.

One laid-off Bed Bath & Beyond employee has already filed a proposed class action suit over the job cuts, according to Law360.com.

In an email, Bed Bath & Beyond said it wasn't its policy to comment on "speculation," adding that "this recent narrative is based on previously announced and reported news."

The retailer said it had shared its strategic update in early February of "moving expeditiously toward a smaller and more profitable store footprint and omni-always model," the retailer said.

"The difficult but necessary decision to reduce our workforce is one of many important actions we are taking to enable Bed Bath & Beyond to improve our financial position and serve our customers well into the future," the company said.

In its statement, Bed Bath & Beyond said it will use proceeds from its stock offering to invest in "merchandise inventory, which will be further supported by a realigned store footprint and cost structure."

Gove said Bed Bath & Beyond's moves have set it on a better course.

"The actions we've taken have enabled us to create the necessary financial runway to begin restoring our iconic Bed Bath & Beyond and Buy Buy Baby businesses," she said. "We have raised $360 million of equity capital since the beginning of February, cured our default under our credit agreement, repaid material amounts of our [asset-based-lending] facility, completed our interest payment for our senior notes, all while jump-starting our turnaround plans."