In a move seen at other retailers, home goods specialty merchant Bed Bath & Beyond Inc. on Wednesday revealed a strategic and business update that is focused on the basics, which means offering a more relevant assortment. The retailer is also closing underperforming stores.
The company said its new approach is to better serve the customer by meeting their needs. And that includes removing one-third of its private-label brands. Similar to Kohl’s, assortments will spotlight national and emerging brands.
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In July, Kohl’s unveiled Discover @ Kohl’s, which involves showcasing dozens of emerging, established and diverse-owned brands that would be new to the retailer and its shoppers. Other retailers, such as Gap Inc. and Walmart, are working to rebalance assortments. All of these moves come as retailers wrestle with price-sensitive shoppers, labor shortages, and, in some cases, bloated inventories.
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At Bed Bath & Beyond, the company said its customers are expected to benefit “from swift actions the company is taking in its Bed Bath & Beyond banner to rebalance its assortment and improve inventory. These include adjusting merchandise allocations to lead with customer preference and bringing back popular national brands, and introducing new, emerging direct-to-consumer brands.”
Bed Bath & Beyond said it is working “expeditiously to increase its national brands inventory where possible and will increase inventory penetration by 20 percentage points over the long term.”
Regarding exiting one-third of its private-label brands, the company’s Haven, Wild Sage and Studio 3B will all be discontinued. “The breadth and depth of inventory across the company’s six remaining owned brands (Simply Essential, Nestwell, Our Table, Squared Away, H for Happy and Everhome) will be substantially reduced to 20 percentage points, reflecting a more balanced sales to stock ratio moving forward,” the retailer said.
The other initiatives of Wednesday’s announcement include searching for a permanent chief executive officer, trimming leadership positions and strengthening the company’s financial position. Mark Tritton, the former CEO, was ousted after the retailer plunged into deep losses as a result of his failed strategy to slash the offering of national brands in favor of private-label products while also scaling back Bed Bath & Beyond’s categories. The company also was hit by significant out of stocks due to shipping delays. Shoppers deserted the retailer in droves after failing to find the products they were seeking. It has since arranged a much-needed loan to continue to operate.
Sue Gove, director and interim CEO, said the retailer is “embracing a straightforward, back-to-basics philosophy that focuses on better serving our customers, driving growth and delivering business returns. In a short period of time, we have made significant changes and instituted enablers across our entire enterprise to regain our dominance as a preferred shopping destination for our customers’ favorite brands and exciting products.”
Gove went on to say the retailer is working swiftly and diligently “to strengthen our liquidity and secure our path for the future. We have taken a thorough look at our business, and today, we are announcing immediate actions aimed to increase customer engagement, drive traffic and recapture market share. This includes changing our merchandising and inventory strategy, which will be rooted in national brands.”
The CEO also said there will be a focus on driving digital and foot traffic, “as well as optimizing our store fleet. We believe these changes will have a widespread positive impact across customer experience, inventory assortment, supply chain execution and cost structure. The customer underpins our decisions, and we are committed to delivering what they want while driving growth, profitability and financial returns.”