Who owns Bed Bath & Beyond? Store closures of 200 locations projected to save company $250-350M annually
Reportedly, stores in 29 states are scheduled to close with California and New York losing the most stores -- six locations each
The retail chain store Bed Bath & Beyond has reportedly announced it will close 63 stores by the end of the year as part of a restructuring plan due to Covid-19. Company spokeswoman Jessica Joyce said in a statement to USA Today, “As we rebuild our authority and establish a truly omni-always shopping experience for our customers, we recently announced a store optimization plan that will see us establish the right network of stores to serve our customers.”
As per the report, stores in 29 states are scheduled to close with California and New York losing the most stores -- six locations each. “This is an important step in our multi-year program to create a sustainable, durable business and invest where it matters most to our digital-first customers and our people,” Joyce said, adding “an exciting array of customer-inspired owned brands” will launch in 2021. In July, the company had announced the closing of about 200 locations. Bed Bath CEO Mark Tritton stated that closing 200 locations would save the company between $250 and $350 million annually after one-time costs. He also said that the Covid-19 pandemic was "felt across our business during our fiscal first quarter, including loss of sales due to temporary store closures," the report further states.
As of May 30, Bed Bath and Beyond had 1,478 stores in the US and Canada, including 955 that operate under the brand name. The company also operates buybuy Baby, Christmas Tree Shops and Harmon Face Values. Even though many of the stores were temporarily closed during the pandemic, the company fast-tracked the launch of buy-online-pickup-in-store and curbside pickup at many stores, the report further adds. And, by end of May, the new facilities were available at nearly 60% of locations, as stated by John Hartmann, the company’s chief operating officer and executive vice president during their July quarterly earnings call. As per USA Today, their net sales from digital channels grew 82% with sales growth of more than 100% during April and May, the company specified in July when reporting quarterly earnings. “In this COVID moment, we believe we can take this opportunity to not just simply close stores, but to pivot and reshape and truly optimize our store footprint,” Hartmann said. “We continue to believe that our physical store channel is an asset for us, as we transform into a digital-first company.”
The history of the company
Warren Eisenberg and Leonard Feinstein held management positions at discount store chain Arlan's. When the company was undergoing financial troubles, the two thought that the market would shift to more specialty stores and decided to form their own company. They opened their first store in 1971 in Springfield, New Jersey called Bed 'n Bath. By 1985, the duo had almost 17 stores operating in the New York metropolitan area and California.
The same year, their first superstore was opened, as an attempt to remain competitive with Linens 'n Things, Pacific Linen, and Luxury Linens. In order to properly represent its expansion, the company changed its name to Bed Bath & Beyond in 1987. In June 1992, the company went public, making its IPO on the NASDAQ stock exchange. Bed Bath & Beyond first reached $1 billion in annual sales in 1999.
In March last year, three activist investment firms — Legion Partners, Macellum Capital Management and Ancora Advisors — conveyed their opinion to remove CEO Steven Temares and restructure the company’s board of directors. The activist investors stated several instances of perceived nepotism, which includes the acquisition of Buybuy Baby, founded by two of co-founder Feinstein’s children, and the acquisition of Chef Central, created by co-founder Eisenberg’s son. These were discussed as examples of poor business practices at the company. Due to the pressure, five independent directors stepped down in April 2019, and the company restructuring took place — the board had to include only 10 directors instead of the previous 12 members.
In May 2019, CEO Temares stepped down and resigned from his seat on the board of directors. Mary Winston, who was appointed to the company’s board as a result of the activist investment firms’ efforts, took over as interim CEO. Then in November that year, Tritton, who was previously Target's chief merchandising officer, took over as CEO.