Bed Bath & Beyond was once a retail powerhouse and destination for Americans in the home furnishings market. But the big box chain now finds itself on the cusp of bankruptcy, another chain of once-dominant retailers that has failed to change with the times.
company Revenue decreasedits share price is down nearly 70% year over year, and management scrambled to cut costs by Close dozens of stores nationwide. Things have become so difficult that the executives He said Last week, there was “great doubt” that Bed Bath & Beyond could continue in its current form.
A Bed Bath & Beyond spokesperson told CBS MoneyWatch that the company has “a team with proven experience that successfully helps businesses navigate difficult situations and become stronger.” Still company He said he was considering bankruptcyamong other strategic options.
Experts point to three main reasons for the retailer’s steady decline over the years.
Slow to embrace the internet
Bed Bath & Beyond opened as a private company in 1971 and went public in 1992. As the American economy boomed, the company then delivered profits for 15 years that met or exceeded Wall Street expectations. At the time, Bed Bath & Beyond was one of the most important stocks an investor could own, KeyBanc analyst Bradley Thomas said.
But the momentum slowed once online shopping hit its stride. E-commerce was already taking off by the early 2000s, said University at Buffalo professor Charles Lindsey, and consumers embraced online shopping for home goods starting around 2010. Consumer behavior expert Lindsey added that once products started arriving at their doorstep immediately and it became easy to return items purchased online, customers were sold.
During its boom, Bed Bath & Beyond was led by former CEO Stephen Temaris, described by Wedbush analyst Seth Basham as an “old-school retailer” whose business model came down to “stacking it high and letting it fly.” By the early 2000s, hundreds of stores had opened across the United States, including many large outlets that required a constant flow of customers and that marked the number of Americans who preferred shopping at the time.
“He thought that was all they needed and he wasn’t willing to adapt,” Basham said of Tamaris. “So it was too late to catch up quickly when retail started to go online.”
Bed Bath & Beyond finally jumped on the e-tailing bandwagon after naming Mark Tritton, the former CEO of Target, as CEO in 2019. But by then, the company was nearly a decade behind the leaders in the space, he said. Basham.
“They continued with the brick-and-mortar model and never brought a website fast enough,” he said.
Major financial slip
Experts said that Triton’s tenure at Bed Bath & Beyond was marked by two noteworthy moves. Redesigned the look of the stores while reducing the amount of merchandise on the shelves. Under Tritton’s direction, Bed Bath & Beyond is in 2021 as well spend Basham said he bought back $625 million in shares, a move that later proved costly.
The big share buyback, Basham said, sent a troubling message to suppliers who ship goods to stores, as sellers fear the company may not have enough cash to pay them back. Many have scaled back their business with Bed Bath & Beyond, resulting in fewer products on shelves and dissatisfied customers.
Notably, it happened at the worst possible time – the two years before Corona virus pandemic. By 2018 and 2019, Lindsey said, consumers were relying more on companies like Amazon, Target, Walmart, and Wayfair for household goods.
And as soon as the pandemic set in, clients began to consider ways to spruce up their home offices.
“When they went online shopping, Bed Bath & Beyond wasn’t most customers’ first thought,” he said. “They are not positioned as firmly as other online retailers.”
Private label fail
Several years ago, Thomas said, Bed Bath & Beyond sought to emulate Target’s success selling private-label products. Under Tritton, store managers began stocking shelves with products from at least 10 brands owned by the company.
But the experiment failed because the products were of low quality, exacerbated by a lackluster marketing campaign, Basham said. bed bath behind announce This past August, it will discontinue three of its own labels — Haven, Studio 3B and Wild Sage. Ultimately, this was a “misreading of the demand for their products,” Basham said.
Can Bed Bath & Beyond Step Back From The Brink? Not likely, experts told CBS MoneyWatch.
“At the end of the day, Bed Bath & Beyond just didn’t do enough from an e-commerce marketing and distribution standpoint,” said Thomas. “They haven’t developed fast enough.”
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