Bed Bath & Beyond is seen on June 29, 2022 in Miami, Florida.
Joe Riddell | Getty Images News | Getty Images
Bed Bath & Beyond on Wednesday announced quick and important steps it is taking to try to revive its faltering business, including layoffs, closing stores and rebranding on its shelves.
On a call with investors, the New Jersey-based retailer offered details of its latest turnaround batch. It said it had begun closing about 150 of its “less productive” stores of the same name. It will also cut costs by reducing staffing by about 20% across the company’s workforce and supply chain. To bolster its balance sheet, the company said it has secured more than $500 million in new financing, including a loan.
These moves are urgently needed for the struggling retailer, which also revealed on Wednesday that sluggish sales continued into the last quarter. Same-store sales were down 26% for the three-month period ending August. 27 – A sharper decline than the declines of recent quarters.
Bed Bath shares are down more than 20% in morning trading.
Her business has already taken many hits. The company said it lost hundreds of millions of dollars in sales because it didn’t have items in stock. It was publicly criticized by activist investor Ryan Cohen, who later sold his entire stake in the company. Former CEO Mark Triton, chosen to develop a successful strategy, was fired by the board of directors in June.
However, the company said its new approach could win back shoppers who have turned away from competitors.
“There is still an incredible degree of love for Bed Bath & Beyond,” said Mara Serhal, new brand president for Bed Bath & Beyond. “We must return to our rightful place as a home class destination, and our goal is to achieve this by pioneering the products and brands our customers want.”
Bed Bath has appointed Patty Wu as the brand president of baby goods chain, Buybuy Baby.
fixing its balance sheet
One of Bed Bath’s critical steps was to find a way to pay the bills and stabilize relationships with suppliers rather than working with a struggling company. He counts on these vendors for stocking shelves and warehouses—especially during important seasons like back to college and the Christmas season.
Bed Bath has run out of cash, ending May with about $100 million compared to $1.1 billion the year before.
On Wednesday, it said it had a plan to cut costs and gain additional cash. It has secured a $375 million loan through Sixth Street Partners, a lender that has provided financing to other retailers including JC Penney and Designer Brands. It also expanded its asset-backed revolving credit facility to the tune of $1.13 billion.
Earlier Wednesday, it said in a statement that it would sell an undisclosed amount of shares.
Together with additional financing, it reduces costs. Its store size will decrease by about 16% with closing. As of late May, the company had 955 stores. This includes 769 namesake stores, 135 Buybuy Baby stores and 51 stores under its Harmon or Face Values brand.
Bed Bath also said it is eliminating the jobs of chief operating officer and warehouse manager.
As part of previous transformation efforts, Bed Bath made a strong push towards private label brands to try to stand out from the competition and carry more exclusive products. Since the spring of 2021, it has launched nine exclusive brands. But instead of boosting sales, some shoppers were confused by the unfamiliar names featured prominently in store displays and had trouble finding the national brands they wanted.
Now, Bed Bath will back away from that approach and bring back more brand names that people will recognize, such as Calphalon, Cuisinart and Oxo, Serhal said. It said it would discontinue three of its own brands — Haven, Wild Sage and Studio 3B — and significantly reduce the stock of other brands.
It said it would also work with national brands to develop exclusive products and add more direct-to-consumer brands.
On the Buybuy Baby side, Wu said the baby-goods chain wants to build on its brand and differentiate itself by becoming the retailer of choice and an advisor to parents and families.
“If you’ve been thinking about how parents used to rely on large amounts of books to know what to expect, we’re here to help new parents who are digitally savvy and native who rely on their smartphones in their daily lives,” she said.
In stores and online, Wu said she will showcase products, make recommendations, and build a community parents can turn to for advice from pregnancy to the early preschool years. Buybuy Baby is also seeking new premium products and automatically enrolling parents with a baby registry in its loyalty program, she said.
Bed Bath shares have been on a meme-fueled roller coaster ride for months, jumping to $30.06 and dropping to $4.38 last year. As of Tuesday’s close of $12.11, shares are down about 17% since the start of the year.
Read the company’s press release here.