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Bed Bath & Beyond cleans up.
The retail giant, known for its ubiquitous coupons, has announced job cuts and store closures in a bid to cut costs as it continues to battle weak sales and a recent reshuffle of the senior management.
In an announcement Wednesday, the New Jersey-based company pledged to cut its workforce by 20% and close about 150 stores.
According to Seth Basham, managing director of financial services and investment firm Wedbush Securities, Bed Bath & Beyond is experiencing some of the same issues as other furniture retailers, such as declining sales and inventory. surplus that must be sold.
But, he said, the company has also been hit by an attempt to overhaul its supply chain during the pandemic, which has led to understocking of store shelves, as well as a shift missed from popular national brands to private brands created by the store.
“This has led to further defection from Bed Bath & Beyond customers and further pressure on their sales trends,” Basham told NPR.
In 2019, the retailer hired former Target executive Mark Tritton as CEO. Part of his plan to rehabilitate the business was to sell merchandise under specific Bed Bath & Beyond private labels like Target does, but the idea didn’t catch on in the same way.
“At Target, there are a lot of consumables and other things [customers] went to the store for, and they came to like and appreciate the private label that they saw,” Basham said. “You didn’t have that draw at Bed Bath & Beyond.
Tritton left the company in June.
Although Bed Bath & Beyond received a boost early in the pandemic when many people were spending more time at home, the gains did not last and revenues continued to decline.
The company said this week that it had net sales of about $1.45 billion in the second quarter this fiscal year, down about 26% from the same period last year.
Acting Director and CEO Sue Gove said Bed Bath & Beyond, having taken a “thorough look at our business”, is now making major changes.
The company expects an injection of outside funding from JP Morgan and investment firm Sixth Street Partners. It’s bringing back some beloved national brands, the company said, and it will try to reconnect with customers through its loyalty program.