Like many other retailers, Bed Bath struggled with its supply chain during the pandemic as ports got congested and shopping patterns shifted. That line is made up of low-priced everyday items such as kitchen utensils and sheets sets. On a call with investors in June, Interim CEO Sue Gove said a portfolio of private brands "has a place in our assortment" and held up Simply Essential as a success story. The company has discontinued at least one of them: Wild Sage, a whimsical line designed with younger customers and dorm room decor in mind. It is unclear what will happen with Bed Bath's collection of private label brands. Same-store sales were down by 12% and 23% in the company's two most recent quarters compared with the same year-ago periods. The strategy has faced scrutiny as Bed Bath's sales have declined. Store displays prominently featured the exclusive but lesser known private labels, pushing out the national brands that many shoppers sought. Starting in spring 2021, it launched nine private label brands that could only be found at its stores and website. Under Tritton, its former CEO, the retailer took a new merchandising approach. To differentiate itself, Bed Bath went head to head with competitors like Amazon and Macy's on price. The merchandise riddleīed Bath and its rivals sell many of the same national brands, such as KitchenAid, Nespresso and Mikasa. "You look like you're making progress, but you end up cutting into the muscle sometimes." 3. "It always worries me when companies get to this point because the things they can do that are easy usually make things worse," he said. That could lead to less convenience and poorer customer service, driving shoppers away.
Other troubled retailers have found a way forward: Best Buy added services like Geek Squad as sales of merchandise like CDs and DVDs faded away, while Petco and Petsmart launched private brands and added vet care, so they didn't just compete on pet food prices.ĭennis warned that struggling retailers can dig themselves deeper into trouble by shrinking store footprints or reducing staffing to cut costs. Discounts may be the quickest way to drum up store traffic, particularly as shoppers feel pinched by inflation, said Wedbush's Basham.īut over the long term, Bed Bath needs to think of a smarter way to stand out, said Steve Dennis, a retail consultant and former Sears executive.
"Do I want to buy a gift card for my relatives when the store may not be there a year from now?" he said.įor now, Bed Bath may want to turn to its tried-and-true strategy of giving away tons of 20% off coupons. Headlines about its dire financial state could also turn off customers, said Harry Kraemer, professor of management and strategy at Northwestern University's Kellogg School of Management. "The problem I have with Bed Bath and Beyond - and I think a lot of customers have with it - is that it feels like 'Why would I go there?'" he said. In almost every category that Bed Bath sells, "there's someone else in the market that does it better," said Neil Saunders, managing director of GlobalData, a retail consulting company. Shoppers can easily buy household items like towels and kitchen gadgets at places like Amazon and Target. Luring shoppers backĪside from fixing its financials, Bed Bath needs to convince consumers to give it another shot. "Then it's whether or not the customer comes back to them," he said. If Bed Bath secures extra cash ahead of the holiday season, it can put off questions about its financial stability and focus on fixing its business, said Seth Basham, an analyst for Wedbush Securities. "Your liquidity position can get strained as you move through the year for a seasonally oriented retailer because you're building working capital," he said. Sixth Street and Bed Bath did not respond to CNBC's requests for comment.īed Bath's cash crunch could worsen if the company did not adequately prepare to take advantage of the busy back-to-school shopping season, said David Silverman, a retail senior director at Fitch Ratings. The retailer has not shared details about how it would accomplish that, but The Wall Street Journal reported last week that the company and asset manager Sixth Street Partners are nearing final terms on a loan of nearly $400 million. Personal Loans for 670 Credit Score or LowerĪs shares of the retailer were swept into a meme-fueled run-up in early August, the company said it was working with financial advisors and lenders to strengthen its balance sheet. Personal Loans for 580 Credit Score or Lower
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