Bed Bath & Beyond in the US was once a leading home goods retailer, attracting shoppers from across the country with a strategy of abundance. The beloved store, which lined malls across the country, became known for the huge variety of products it carried, in every color and style.
Over the years, it has become the benchmark for almost everything homewares and beyond. Bed Bath & Beyond was founded in 1971 in New Jersey by Warren Eisenberg and Leonard Feinstein. The duo had previously worked in the management of ‘Arlans’, a local discount chain, and saw growth prospects in bedroom and bathroom homewares. “We had watched the decline of big department stores and knew that specialty stores would be the next big trend in retail,” Feinstein told the trade publication Chain Store Executive in 1993, according to Insider.
The original name of the company was ‘Bed n’ Bath’, reflecting the specialist linen and bath products. The company was later renamed Bed Bath & Beyond in 1987. By 1985, Bed Bath & Beyond had expanded to 17 locations, mostly in the greater New York area and California.
The 1980s were a time of increased competition for Bed Bath & Beyond, thanks to the rise of stores like Linens n’ Things. In response, the company launched its first supermarket concept in 1985, a 20,000 square meter store that would become the model for modern Bed Bath & Beyond stores.
The company has been widely recognized as a pioneer of the superstore movement in America. This new massive store featured a wide range of brands and products in almost every color and style, setting it apart from the department stores of the time that had a limited variety of specialty collections. This strategy is known by analysts as a category killer, a method also used by retailers such as Toys RUs, Best Buy and Costco. This method aims to bring more shoppers into stores by selling a little bit of everything, across all categories and consumer demographics.
In the following years, Bed Bath & Beyond opened more superstores in New Jersey, California, Virginia, Illinois, Maryland and Florida. Its new store model, which cleverly grouped product categories and strategically placed impulse buys near the cash registers, helped sales reach $134 million by 1991.
Bed Bath & Beyond filed to go public in June 1992. As the company continued to grow, it added popular products such as appliances. In 1999, its sales reached $1 billion, and by the turn of the millennium, Bed Bath & Beyond had 311 stores in 43 states.
In 2002, Bed Bath & Beyond acquired health and beauty retailer Harmons, followed by holiday chain Christmas Tree Shops in 2003. Over the next 10 years, the company continued to focus on acquisitions, including the purchase of Buy Buy Baby in 2007. Bed Bath & Beyond also purchased both Linen Holdings and Cost Plus World Market in 2012. By then, “Bed Bath & Beyond” was prominent in popular culture as well, appearing in TV series like Broad City.
During this time, several big box stores, including Bed Bath & Beyond, began to show signs of decline as consumers turned to e-commerce and other competitors such as Walmart and Target. ». Suddenly, stores like Linens n’ Things went into lockdown.
In May 2019, CEO Steven Temares was ousted by a group of activist investors, who demanded his resignation in a hard-hitting 168-slide presentation outlining their demand. Several board members also resigned at the behest of investors. In that presentation, investors blamed the company’s leaders for the company’s failure to adapt to today’s retail environment, which caused sales to fall.
In November 2019, former Target CMO Mark Triton took over from interim CEO Mary Winston as the company’s new leader. Some experts had expected the appointment of Triton, who previously served as head of product promotion at Target, to produce results. However, the recovery was not expected to be very easy.
Under Triton’s leadership, the company sought to adopt a more targeted and organized shopping experience and implemented the biggest, last-generation, change to its product range. The revamp included reducing the product selection and launching its own private label brand.
Despite a sales boom at the start of the pandemic due to increased public interest in homewares, Bed Bath & Beyond’s new limited product selection has exacerbated supply chain problems, leading to empty shelves and frustrated shoppers.
Sales continued to decline, exacerbated by rising inflation to record levels and subdued customer demand in recent months, according to Triton. “Our business has been affected by extraordinary macroeconomic factors such as global supply chain derailment, uncertainty from the Omicron variant of the coronavirus, unprecedented inflation, rising interest rates and a turbulent geopolitical landscape, which have weighed on consumer confidence Triton told investors in April.
In June 2022, the company announced that it would replace Triton as CEO, as well as change several top executives, marking yet another shakeup in Bed Bath & Beyond’s leadership.
The company was the subject of a stock rally in August 2022, largely thanks to activist investor Ryan Cohen. Shares of Bed Bath & Beyond jumped 29% in the month as meme-stock investors rushed to buy when they realized the stock was going viral. The whole venture was inspired by Cohen, who headed RC Ventures, as well as the co-founder and former CEO of Chewy and chairman of GameStop, who bet on the company, according to CNBC. However, shares plummeted when Cohen announced he was starting to sell his shares shortly after.
On August 31, 2022, Bed Bath & Beyond announced that it would close approximately 150 stores and reduce the company’s workforce by 20%. The announcement came before the company informed investors of its earnings, which had fallen 25% in the last quarter. The company told investors that the closings and layoffs will help it cut costs by $250 million by the end of 2022.
The once golden child of department stores, Bed Bath & Beyond, filed for bankruptcy in New Jersey on April 23. The company told the Securities and Exchange Commission in January that it had significant doubts it could continue to operate. The bankruptcy came after months of turmoil. In September 2022, Bed Bath & Beyond announced it would close 150 stores and cut 20% of its corporate jobs in an effort to cut costs. In June 2022, it reported a net loss of $358 million in the first quarter and then announced that it was replacing CEO Mark Triton and a number of other executives in another attempt to reshuffle its leadership.
In September 2022, the CFO of Bed Bath & Beyond, Gustavo Arnal, was found dead after falling from a New York City building. Arnal had recently been named in a federal class-action lawsuit that also named Cohen for fraud. The lawsuit alleged that Cohen and Arnall were working together in a “fraudulent scheme to artificially inflate the price of the company’s publicly traded stock.” Bed Bath & Beyond executive Laura Crossen has been named as Arnal’s interim successor.
