Photos: Bed, Bath & Beyond
The new boss is the same as the old boss at Bed Bath & Beyond
Bed Bath & Beyond’s search for a CEO is over. The retailer yesterday said that it has named Sue Gove as president and chief executive officer of the company. Ms. Gove has been the retailer’s interim CEO since June when she replaced Mark Tritton.
“Sue is the best person to serve at the helm of Bed Bath & Beyond and continue leading the company,” Harriet Edelman, independent chair of the retailer’s board of directors, said in a statement. “During her tenure as Interim CEO, Sue took consequential actions to increase liquidity and establish the groundwork to improve customer loyalty, traffic and market share. Her intense focus on cash, and expertise in managing working capital and liquidity are matched by a great operating mind and further complemented by a new leadership team that brings deep merchant, omni and digital expertise in modern retailing. A strong team builder and hands-on leader, Sue has earned the trust of associates across headquarters, stores and operations and is working alongside our two brand presidents to support our important supplier community.”
Ms. Gove in August went public with her plan to turn Bed Bath & Beyond around, which includes reducing the emphasis that her predecessor placed on private brands. The retailer discontinued three of the nine private labels rolled out during Mr. Tritton’s tenure and reduced its inventory on the rest by 20 percent. Ms. Gove pledged a greater focus on popular national brands and emerging direct-to-consumer items. Bed Bath & Beyond has also closed stores, reduced corporate staff and secured commitments for new financing.
Ms. Gove claims that the Bed Bath & Beyond organization is “more strategically and culturally focused” than ever before.
“I am energized by the initiatives underway to provide our customers with an exceptional shopping experience, easily accessible products and compelling values across our Bed Bath & Beyond, buybuy BABY and Harmon brands. We have a significant opportunity ahead and we intend to regain our dominance as a preferred shopping destination.”
Ms. Gove has previous executive experience in retail having served as president and CEO of Golfsmith and COO of Zale Corporation.
Discussion Questions
DISCUSSION QUESTIONS: Does Sue Gove have the right plan in place to turn Bed Bath & Beyond Inc. around? What do you see as the most significant challenges the retailer needs to overcome?
Poll
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Kathleen Fischer
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Ken Lonyai
Consultant, Strategist, Tech Innovator, UX Evangelist
I suspect Bed Bath & Beyond found it very difficult to recruit externally for this role. However leaving Ms. Gove in place is sensible as she knows the business, has a retail background, and is already working on a turnaround. With regard to that turnaround, it is reasonable and based on common sense. However it is largely about stabilizing the business rather than putting it in a position to grow. There is very little in the plans which explain how Bed Bath & Beyond will differentiate and compete in a very crowded market. That matters because with home furnishings volume growth in negative territory, the only way to grow is by taking share from others.
Leading Bed Bath & Beyond is not for the faint of heart. As a Board member, Ms. Gove has had a front row seat for the ups and downs this company has experienced. Ms. Gove certainly has the experience to lead this organization, but whether she can turn it around is another question. Like all newly installed CEOs, I will give her the benefit of the doubt, but the market has little patience for a long slow recovery. Of the many challenges this retailer faces, I’d say re-gaining the loyalty of their once very loyal base should be at the top of the list.
The proof is in the results that Sue Gove may deliver, but it makes sense for the company board to avoid any further turnover at the top of the company. If they embrace the strategy of a smaller store footprint and more national brands, they should give Ms. Gove a chance to execute that plan. The question in the background: Does Bed Bath & Beyond have the time and the financial strength to make it work?
There were some good people in the regime that Tritton cleaned out. Bed Bath & Beyond should try to selectively bring them back.
I’d like to say that her announced plans and recent actions demonstrate that she has taken very seriously the lessons provided by the former CEO’s strategy. But I could have said the same thing when Ron Johnson was replaced at JCPenney. Acknowledging what didn’t work isn’t the same as knowing what will work. I appreciate all the financial and operational kudos, but it’s going to take merchandising and marketing magic to turn this ship around.
Which as a corollary discussion raises the question: What are boards of directors thinking about when they hire the Ron Johnsons and the Mark Trittons who, as good as they might have been in prior respective jobs, are not fit to run companies?
RJ and MT both had impeccable resumes and by many measures looked totally capable of running a company. Interesting that they both came from Target, a stable retail environment ahead of the curve for many years. And both flamed out remarkably quickly. But both had great ideas. And a really bad sense of the calendar on which those ideas could be executed. With a lot of impatience coming from the market I might add. We are an impatient bunch. I’ll argue that the boards made what could have been good hires, but that they did so with not nearly enough vetting of the new CEO’s agenda. Isn’t that the board’s whole job — to thoroughly pressure test the new CEO’s agenda, agree on metrics, boundaries, calendar, and then support the execution? JCP and Bed Bath & Beyond were both as much, if not more, board failures as they were CEO failures.
They read the headlines.
Everybody hold on. With her background and obvious experience, this is going to be big. And certainly welcomed by the market. Now the fun begins and the excitement begins. Welcome Sue Gove.
It makes sense to leave her in the position rather than introduce more turmoil with an outside hire. Unfortunately, Bed Bath & Beyond has a big challenge ahead to regain and/or improve customer loyalty and distinguish itself in an increasingly crowded market.
The last time we wrote about the CEO position for Bed Bath & Beyond, I believe I asked, “who would want this job?” No one, hence, Ms. Gove.
Has Bed Bath & Beyond lost its reason for being? I think so. Good Luck, Ms. Gove.
Ms. Gove’s initial actions as interim CEO have been correct and I’m rooting for her to succeed wildly. To do so, she’ll need to differentiate Bed Bath & Beyond in a competitive market and that’s no easy task. I like her instincts of shuttering underperforming stores, reducing private labels and amping up DTC. She’d be wise to leverage every ounce of analytical horsepower she can muster with existing systems/tools to uncover new insights that drive differentiating moves. I wish her the best.
Though going through challenging times, new leadership is almost always a drive for change. The fact that Bed Bath & Beyond has selected someone and now has a path to move forward is a great step to recovery. These aren’t simple processes, but I’m expecting a real turnaround for the firm as this is nothing like rats leaving a sinking ship – instead we’re seeing thoughtful moves towards rejuvenating a brand. Looking forward to a bounce back for Bed Bath & Beyond.
Bed Bath & Beyond needs to pretend it was gone and then go shop for the things they believe makes up its unique selling proposition and figure out what they can realistically own. What assortments to those places carry, what types of designs, what price points, how are their ecommerce sites, what are the gaps?
And when it was first announced that Tritton was joining, I suggested they figure out what their brand purpose they had. I doubt anyone has explored that concept or if they did, couldn’t bring that to strategies to be taken across the business. They have to do that, coupled with the above.
Maybe at this point, the best they can do it sell the assets to Tai Lopez & Co and his team can optimize the website, make it an ecomm business and grab what is left of its equity.
The more relevant question, I think, is “would someone else be better?” Unless someone emerges, we should all just wish her the best of luck.
Bed Bath & Beyond has done some things right. And yet, no one knows of them. They can continue to shuffle and shift — to rearrange the deck chairs in their store and assortment, in their mix of private and national brands, in their approaches. But that does not arrive at success. Unless they tell the world they’ve changed and maintain a consistent campaign doing that, executing the changes, and delivering value, customers still won’t come to the store.
Yes. They have a problem which desperately needs advertising. And that takes real risk — because everything else has the appearance of “control” yet advertising is tricky. They’ll need an exceptional team focused on their store as a product (itself) for that advertising to do any good — and those teams are quite rare.
Ms. Gove is probably very talented, but Bed Bath & Beyond is beyond much hope at this point. Shoppers don’t know and don’t care who runs the stores. They care about the experience shopping and from the products they purchase there.
All that the policy churn of the last five or so years has done is create customer confusion. And as that happens, the many other competitors, especially a few big ones, soak up the confused and disenfranchised (former) customers. That can only go on for so long before the ship can’t be righted. I believe that’s where Bed Bath & Beyond is now. Kind of like Sears: existent for now, but hopeless.
Bed, Bath & Beyond continues to weather quickly changing consumer expectations. This news is another example of the ongoing behind-the-scenes efforts they’re making to meet those demands, which also includes investments in technology to help drive the customer experience. I look forward to seeing what the next few months bring for the company.