Bed Bath & Food

Discussion
May 11, 2012

By all accounts, Bed Bath & Beyond’s (BB&B) $495 million deal to acquire Cost Plus will create a match made in heaven. The two companies have engaged in a successful test of specialty food departments in BB&B stores.

Barry Feld, CEO of Cost Plus, Inc., which operates 259 stores under the World Market and Cost Plus World Market banners as well as worldmarket.com, said, "Our successful merchandising and product collaborations over the last two years have demonstrated that our organizations work well together and that we can make key contributions to the continued success of the combined company."

Steven Temares, Bed Bath & Beyond’s CEO, said, "Through the combination of the highly talented Cost Plus organization with our own dedicated associates, we expect to be able to do even more for, and with, our collective customers."

Gene Castagna, the company’s CFO, said the chain was looking to add more Cost Plus sections to BB&B stores. Food, he told The Wall Street Journal, "is a future opportunity."

Bed Bath & Beyond currently operates stores/websites under its own banner as well as BuyBuy Baby, Christmas Tree Shops, Harmon and Harmon Face Values.

Reactions were largely positive to the announced deal.

Laura Champine, an analyst with Canaccord Genuity, according to the AP, wrote, "The transaction will expand Bed Bath & Beyond’s consumables assortment into the gourmet food and beverage categories, while BBBY provides greater scale and capital structure to support Cost Plus’ 259 stores."

"They’re getting maxed out on the number of Bed Bath stores that they can operate in the U.S.," Warren Shoulberg, editorial director of Home Textiles Today, told The Record. "So I’m sure they’re looking for another big growth vehicle. And they have a ton of cash; no debt. They certainly have the money to do something like this."

Discussion Questions: What is your reaction to the Bed Bath & Beyond acquisition of Cost Plus? Do you see the company aggressively expanding food in its current stores? Do you think the combined company might pursue the creation of a completely new format and/or website?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

9 Comments on "Bed Bath & Food"


Sort by:   newest | oldest | most voted
Dick Seesel
Guest
10 years 17 days ago

Yes, there is an opportunity to expand the Cost Plus specialty food business into Bed Bath and Beyond — but there is an even bigger opportunity to add the “World Market” assortment of home decor, furniture and gifts. It will take a large footprint to pull this off, but the move allows BB&B to become an even more dominant home goods retailer.

Paula Rosenblum
Guest
10 years 17 days ago

I agree with Richard. Bed Bath & Beyond has been flirting with home decor in the store for at least 15 years (when it was in talks with the late Domain Home Fashions to put stores-within-a-store). It’s probably better than the current health and beauty aids section we have in BBB here in Miami and compliments the existing assortment.

Cathy Hotka
Guest
10 years 17 days ago

This is a plus for Bed Bath … but is it a plus for World Market? As a lucky customer of a World Market that’s only three blocks from my home, I hope that World Market’s new parent will keep its format and selection intact.

David Schulz
Guest
David Schulz
10 years 17 days ago

Bed Bath & Beyond had to look somewhere for growth in a home goods market that has been adversely affected by the sluggish US housing market. Expanding decor merchandise protects its flank against a resurgent Pier 1 Imports, while food items give it panache associated with higher-end specialty retailers. At this point it seems like a pretty good deal, one that appears to have more upside than down.

Ryan Mathews
Guest
10 years 17 days ago

Put me in Richard and Paula’s camp.

The “World Market” approach to home decor — a potential real plus.

The expansion of niche, specialty food products in BB&B — not so much.

Roger Saunders
Guest
10 years 17 days ago

Bed, Bath, & Beyond would do well to learn lessons from TJX which has done a masterful job in blending TJ Maxx, Marshall’s, and Home Goods.

The system can work, as long as BBB doesn’t attempt to centralize too much of the decision-making. They are picking up a bargain with a well-viewed retailer in Cost Plus.

This is an acquisition that could prove to be highly effective and profitable.

Tim Flowers
Guest
Tim Flowers
10 years 17 days ago

Neither Bed Bath & Beyond nor World Market seem to be doing much business in the North Carolina market, based on the customer counts I see when I visit each. But World Market seems the weaker of the two despite better pricing and a more interesting product selection. BBB has a reputation for very high prices, which they offset with some couponing. Hopefully they won’t go in to WM with the same strategy.

Craig Sundstrom
Guest
10 years 17 days ago

My initial reaction was along the lines of a loyal Oaklander: oh great, another (of our already small number of) Eastbay HQ(s) waving bye-bye; of course RW is probably looking for something less visceral. Certainly there’s substantial overlap in the home decor area, but just as certainly the approach of the two has been different (BBB a value oriented big box, CP a quirky niche retailer) … can they either maintain the separate identities or come up with something that combines the best of both? I wish then well (with a bit more self-interest than usual).

Bob Graham
Guest
Bob Graham
10 years 17 days ago

BBBs near my home look like junk shops. Cost Plus seems more inviting. We’ll see which footprint prevails. As far as Cost Plus, its another sad day for the City of Oakland. Would guess that a year from now the only people left will be some buyers. The rest of the infrastructure will be absorbed by New Jersey.

wpDiscuz

Take Our Instant Poll

What grade would you give Bed Bath & Beyond for its acquisition of Cost Plus?

View Results

Loading ... Loading ...