Bed Bath & Beyond to Close 150 Stores
Company will reduce retail footprint by 16%, lay off 20% of workforce as its sales continue to crater.
Bed Bath & Beyond has announced that it will close 150 stores—about 16% of its retail footprint—and lay off nearly a quarter of its workforce.
The home furnishings giant said the 150 stores it is shuttering are “lower-performing” outlets in a portfolio that totaled 955 prior to the announcement, including 769 namesake stores, 135 Buybuy Baby outlets and 52 stores under its Harmon and Face Value brands.
The retailer also said it will be laying off about 20% of its corporate and supply chain workforce. The corporate cuts include the elimination of the chief operating officer and chief stores officer positions.
Bed Bath & Beyond reported a net loss of $358M in its Q2 2022 earnings statement, more than seven times the red ink it experienced a year ago. In its most recent update, same-store sales plunged 26% for the three-month period ended Aug. 27.
According to a report in CNBC, the NJ-based retailer has lost hundreds of millions of dollars in sales because of a lack of inventory, leading activist investor Ryan Cohen to sell his entire stake in the company, whose stock has lost more than 17% of its value since the beginning of the year.
Bed Bath & Beyond is not relying on the cost-cutting moves alone to improve its bottom line: the company also announced that it has secured more than $500M in new financing, including a $375M loan from Sixth Street Partners and an expansion of a $1.13B asset-backed revolving credit facility.
“We’ve taken a thorough look at our business, and we’re announcing immediate actions aimed to increase customer engagement, drive traffic and recapture market share,” said Interim CEO Sue Grove, in a statement announcing the cutbacks.
“This includes changing our merchandising and inventory strategy, which will be rooted in national brands,” Grove said.
Grove replaced CEO Mark Tritton, who was ousted by the company’s board in June.
According to CNBC, Bed Bath & Beyond’s problems stemmed for more than supply-chain disruptions. The retailer made an aggressive push into private-label products, launching nine exclusive brands in the past year that it prominently displayed in its stores—a move that appeared to backfire as customers couldn’t find popular name brands.
Grove said in her statement that the company will discontinue three of its private label brands—Haven, Wild Sage and Studio 3B—and work closer with national brands.
In January 2020, Bed Bath & Beyond sold about half of its real estate portfolio—more than 2M SF—to private equity firm Oak Street Real Estate Capital in a $250M sale-leaseback deal.