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Will Bed Bath & Beyond’s new turnaround plan work any better than the previous one?

September 1, 2022Written by George Anderson

Photo: Getty Images/JHVEPhoto

Bed Bath & Beyond yesterday went public with the struggling retailer’s new plan to get its business on solid footing. The company says that the planned changes will enable it to meet the demands of its customers, drive sales and profits and leave it with a stronger balance sheet and cash flow. Its stakeholders certainly hope management has it right. "We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns," said Sue Gove, director & interim CEO, in a statement. “In a short period of time, we have made significant changes and instituted enablers across our entire enterprise to regain our dominance as a preferred shopping destination for our customers' favorite brands and exciting products. We command a special presence in the Home and Baby markets, and we intend to fulfill our opportunity to be the category retailer of choice.” Bed Bath & Beyond is pulling back on former CEO Mark Tritton’s emphasis on building its private labels to focus on national brands. Mr. Tritton’s strategy came under criticism when supply chain disruptions in the retailer’s owned brands led to out-of-stocks and lost sales (approximately $100 million in the last quarter), particularly without a sufficient inventory of key national brands to fill the demand. The retailer has pledged fast action in bringing in popular national brands and emerging direct-to-consumer items. Bed Bath & Beyond said it would discontinue three of the nine private label brands introduced under Mr. Tritton (Haven, Studio 3B and Wild Sage) and reduce inventory on the remaining brands it owns by 20 percent (Everhome, H for Happy, Nestwell, Our Table, Simply Essential and Squared Away). Management also announced cost-cutting measures that include shuttering about 150 “lower producing” Bed Bath & Beyond stores out of the 700-plus stores it currently operates under the banner. The company is also laying off about 20 percent of its corporate and supply chain staff. The moves are expected to save the retailer about $250 million in the current fiscal year. Bed Bath & Beyond also said it would reduce planned capital expenditures to $250 million from $400 million. The retailer has also secured commitments for $500 million in new financing through a $375 million loan with Sixth Street Partners and by expanding its $1.13 billion asset-backed revolving credit facility.

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