Bed Bath & Beyond makes one last attempt to save itself

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The chain said on Wednesday it will lay off about 20% of the company’s employees, close about 150 stores and scrap several of its internal household goods brands.

Crucially, the company also said it has secured more than $500 million in funding to amplify its ailing financial problems.

Berna Barshay, an independent retail analyst, said the company’s actions were the “prototypical rearrangement of deckchairs on the Titanic” and that the company was in structural decline.

Shoppers have switched to other chains in recent years such as: Target (TGT)while the novelty of Bed Bath & Beyond’s beloved coupons has faded as consumers can easily find cheap prices on Amazon (AMZN) and other online sites. Shares of Bed Bath & More (BBBY)which has become a violated “meme stock” in recent years, fell 20% in early trading Wednesday.
The announcements, part of a “strategic update,” came just days after a major investor dumped nearly all of its stake in the company and reports surfaced that some Bed Bath & Beyond suppliers had halted shipments due to unpaid bills.

Bed Bath & Beyond also said on Wednesday that sales in stores that have been open for at least a year fell 26% in the last quarter.

In June, the company announced that CEO Mark Tritton, who joined Target (TGT)in 2019 to try to turn the tide was pushed out. Tritton led the growth of the chain’s own brands, a strategy that worked at Target but failed at Bed Bath & Beyond.

The company said Wednesday it is reversing this strategy. This means that national brands appear more prominently instead of own brands. Three of its brands will also face the chopping block, including Studio 3B, Haven and Wild Sage.

But big brands may be reluctant to give Bed Bath & Beyond their best stuff, Barshay said.

Bed Bath & Beyond is “financially against the wall, so it’s getting harder to keep stock from key suppliers,” she said. “If you’re Dyson and Keurig and you’re trying to maintain a halo over your brand, the last thing you want is a discount.”



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