Closing stores, laying off employees...Home furnishing retail giant Bed Bath & Beyond struggles to survive

It is learned that on August 31, American home furnishing retail giant Bed Bath & Beyond announced that it will take a series of measures to revive its troubled business, including layoffs, store closures and restructuring of its brand portfolio.

Bed Bath & Beyond's business has taken a number of hits. The company said it lost hundreds of millions of dollars in sales because it didn't have merchandise in stock. The retailer also revealed that the sales slowdown had continued into the most recent quarter. Store sales plunged 26% during the three-month period ending Aug. 27, a steeper drop than in recent quarters.

Bed Bath's stock has been on a roller coaster ride for several months, surging as high as $30.06 and falling to a low of $4.38 over the past year. As of Tuesday's close of $12.11, the stock is down about 17% year to date.

Drastically overhaul existing businesses

The company said it has begun closing about 150 offline stores with "low sales" and will reduce costs by cutting corporate and supply chain staff by about 20%. To maintain balance sheet, the company said it has obtained more than $500 million in new financing, including a loan.

In addition, the company is trying to win back customers by adjusting its brand portfolio.

In order to catch up with its competitors, Bed Bath has previously made a big push into private-label products and launched nine exclusive brands since the spring of 2021. However, this move did not increase sales, but instead made consumers confused about the brand focus.

Now, Bed Bath will abandon that approach and bring back more recognizable brands, such as Calphalon, Cuisinart and Oxo, Sirhal said. It will discontinue three of its own brands, including Haven, WildSage and Studio3B, and significantly reduce the inventory of other brands.

Bed Bath will also work with national brands to develop exclusive products and add more direct-to-consumer brands, she said.

Seek financing and stabilize supplier cooperation

Another key move for Bed Bath is stabilizing relationships with suppliers, which it relies on to stock its shelves and warehouses, especially during key seasons like back-to-school and Christmas. Suppliers are wary of working with a struggling company, so Bed Bath is seeking more financing.

Bed Bath, which has been burning through cash and had just $100 million at the end of May, compared with $1.1 billion a year earlier, said Wednesday it plans to cut costs and generate additional cash.

It secured a $375 million loan through Sixth Street Partners, a lender that provides financing to other retailers including JCPenney and Designer Brands, and expanded its asset-backed revolving credit line by $1.13 billion.

With the additional financing, Bed Bath is cutting costs. The store closures will reduce its store footprint by about 16%. As of the end of May, the company had 955 stores. That includes 769 namesake stores, 135 Buybuy Baby stores and 51 stores under the Harmon or Face Values ​​brands.

Editor✎ Ashley/

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