Bed Bath & Beyond is walking a narrow tightrope right now. One wrong move and the company could crumble completely.
Bed Bath & Beyond has been in big trouble for a while. The retail giant has been suffering from severely lagging sales and a lack of viable leadership for quite a few years. Consequently, the business has gotten to the brink of near collapse. Bed Bath & Beyond, not wanting to go under, is now resorting to last-ditch efforts to save its failing enterprise.
After putting its best foot forward Bed Bath & Beyond was able to secure an additional $500 million worth of financing. And it’s counting on a stellar holiday season to springboard it back into a better place. Part of its strategy to make that happen is to close stores and lay off as many workers as is deemed necessary. CNBC reported that Bed Bath & Beyond will close 150 of its existing stores in the coming months. The retailer will also terminate 20% of its total workforce.
In addition to the cost-cutting measures, Bed Bath & Beyond is planning to put a big focus back on re-attracting lost customers. “We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns,” said the retailer’s interim CEO Sue Grove. The temporary CEO said that with the newly secured financing she plans on getting the big-name brands that customers are used to seeing in their stores back on the shelves.
Under the former CEO Mark Tritton’s leadership Bed Bath & Beyond put a big focus on bolstering its in-house brands. This strategy is something that Tritton employed while working at Target and it worked really well for them. However, in the case of Bed Bath & Beyond, it backfired in a big way. It was off-putting and confusing for many loyal customers used to seeing certain brands.
Tritton just didn’t understand Bed Bath & Beyond’s customer base and it left the retailer in a worse-off spot than it was to begin with. Sue Grove is trying to reverse the damage that was done under Tritton by bringing back the brands that consumers came so accustomed to seeing in the stores. In addition, to reviving relationships with big brands, 1/3 of the private labels created under Tritton’s direction are being completely discontinued. The remaining in-house brands will receive measurable reductions in inventory.
Bed Bath & Beyond is hopeful that by backtracking and focusing on bringing back customers to facilitate strong holiday sales it can pull off an epic comeback. That being said, this could very well be the retailer’s last chance to do so. Its same-store sales are in an abysmal spot. The ever-declining sales come as the company is contending with mounds of debt. This situation has strained relations with suppliers that it has been unable to reliably pay. This is a similar situation that Toy R Us was in just before it was forced to shutter its doors permanently. Bed Bath & Beyond is teetering a very fine line right now. One wrong move and it’s bye bye Bed Bath & Beyond.