Bed Bath & Beyond will shut 150 shops and layoff 20% of its workers.
Early on in the epidemic, when many people were staying home, Bed Bath & Beyond saw a rise in sales, but those gains have now evaporated, and the company's profits have been on the decline ever since.
Retailer Bed Bath & Beyond is cleaning.
The retail behemoth, well-known for its discounts, has announced layoffs and shop closures in an attempt to reduce expenses as it continues to struggle with lackluster sales and a recent shakeup in its top leadership.
The New Jersey-based firm said on Wednesday that it plans to lay off 20% of its workers and shutter about 150 locations.
Wedbush Securities managing director Seth Basham claims that Bed Bath & Beyond is experiencing some of the same issues as other retailers in the home furnishings industry, including a fall in sales and excess inventory that has to be disposed of.
An unsuccessful effort to switch from well-known national brands to the company's own private labels, he added, and understocked shop shelves during the epidemic also affected business.
Basham told NPR that as a result, "more consumers defected from Bed Bath & Beyond," which put more strain on the retailer's sales patterns.
Mark Tritton, formerly of Target, was named CEO in 2019. Private labels made only for Bed Bath & Beyond, like Target's private labels, were supposed to be part of his strategy to revive the firm, but they never caught on.
"At Target, there are a lot of consumables, and other items [customers] went to the shop for, and they began to appreciate and like the private label brands they saw," Basham said. You couldn't get that magnet at Bed Bath & Beyond, they said.
In June, Tritton decided to leave the firm.
Early on in the epidemic, when many people were staying home, Bed Bath & Beyond saw a rise in sales, but those gains have now evaporated, and the company's profits have been on the decline ever since.
The business reported this week that its second-quarter fiscal year net sales were around $1.45 billion, down nearly 26% from the same time the previous year.
Following a "thorough review of our company," director and interim CEO Sue Gove said that Bed Bath & Beyond would be implementing significant changes.
Funding from outside sources, such as J.P. Morgan and Sixth Street Partners, is anticipated by the business. The business has said that it would reinstate some of the nation's most popular brands and use its loyalty program to re-establish connections with former consumers.
