- Bed Bath & Beyond announced a sweeping turnaround plan during a financial-update call for investors.
- The plan includes backpedaling on owned brands in favor of national, well-known labels.
Bed Bath & Beyond stores may soon look a little different.
The flailing home-goods retailer unveiled its ambitious turnaround plan on Wednesday, a plan that includes closing 150 stores, cutting 20% of its staff, and backpedaling on its strategy of pushing private labels over national brands.
The changes come after a tumultuous few years for the once-dominant home emporium that have included executive turmoil, mounting losses, and a volatile stock price thanks to meme investors.
Bed Bath & Beyond said during a financial-update call that it plans to institute a "straightforward, back-to-basics philosophy" in order to turn things around.
"There is still an incredible degree of love for Bed Bath & Beyond," Mara Sirhal, the company's newly appointed brand president, said during the call. "We must get back to our rightful place as the home category destination."
Here's a rundown of what the retailer has planned for the months ahead:
Backing away from owned brands in favor of well-known labels
Perhaps the biggest strategy shift for Bed Bath & Beyond is its inventory mix: the company said it would immediately start prioritizing national brands over its private-label offerings, a move that would highlight "beloved brands" like Cuisinart and OXO.
Individual stores will be tasked with overhauling their aisles and end caps to lead with national brands, the company said.
It's a major change in direction for Bed Bath & Beyond, which announced in 2020 that it would launch 10 private-label brands as part of a three-year "transformation strategy" under since-ousted CEO Mark Tritton. Now, the retailer is axing a third of its owned brands and reducing the amount of private-label products in its inventory by 20%.
In the coming months, Bed Bath & Beyond will liquidate the remainder of its private-label products through sales and promotions, handing them off to third-party sellers, and canceling orders altogether.
"Our customer has communicated clearly that national brands are a really important part of their shopping experience with us," Sirhal said.
Closing 150 stores nationwide and laying off staff
Bed Bath & Beyond said Wednesday it would close 150 underperforming stores and pause store openings and remodels. The company has already started shutting down some locations and said 50 to 60 stores would be included in the first wave of closures.
The company had 955 stores — including Bed Bath & Beyond, Buybuy Baby, and Harmon stores — as of May 28.
In addition, the retailer plans to lay off 20% of its corporate workforce and reconfigure its organizational structure, which includes eliminating the chief operating officer and chief stores officer positions.
Bed Bath & Beyond said the restructuring moves are expected to save about $250 million in the fiscal year.
Securing over $500 million in new financing
Bed Bath & Beyond said it had made a deal with JPMorgan and Sixth Street Partners for a loan that will be used to rebalance the company's product array, increase customer traffic, and help it work with vendors.
The retailer is also planning an equity offering of up to 12 million shares, the proceeds from which will be used to pay down debt.
Hanging onto Buybuy Baby
Baby retailer Buybuy Baby would not be up for sale after all, despite earlier plans to offload the company — Bed Bath & Beyond's interim CEO Sue Gove had said as recently as June that there was still interest in Buybuy Baby from possible acquirers and that a sale was not off the table.
Now, it seems the company has changed its mind.
"Our board and strategy committee have determined that Baby's future growth and value can best be accelerated as part of our portfolio at this time," Gove said during the earnings call.
The baby brand had previously been a point of contention between Bed Bath & Beyond and activist investor Ryan Cohen, who argued that Buybuy Baby was likely worth billions of dollars and should be spun off. Cohen reached a deal with Bed Bath & Beyond in March that resulted in the retailer adding new board members and agreeing to a review of Buybuy Baby.
Cohen recently sold his entire stake in the company, a move that sent the stock plummeting.