From Empire to Shadow: The Decline of Bed Bath & Beyond
Bed Bath & Beyond, is trying to keep up in the cutthroat world of retail. With sales at in all-time low and suppliers jumping ship, the company has decided to take a bold step to turn things around. By forcing their white-collar workers back into the office for 4 days a week to waste their time. But it still is not enough to stop the road trip to bankruptcy for Bed Bath & Beyond. Now bed bath and beyond is closing up its stores.
The once mighty Bed Bath & Beyond, with its vast empire of 1,560 stores and 65,000 loyal subjects, earned a throne-worthy $12.3 billion in revenue. Fast forward to today the company is nothing more than a shadow of its former glory. Earning a measly $4.2 billion in sales over 9 months and a workforce that has been reduced to a fraction of its former size. With only 30,000 subjects left to serve the kingdom. All of this is because of relentless competition from online retailers like Amazon and multiple mistakes by the company leadership.
Warren Eisenberg and Leonard Feinstein were the masterminds behind Bed Bath & Beyond. The company is well known for its unconventional approach to retail, giving managers the freedom to do as they please with shelves and inventory. The strategy work for many years, keeping both investors and customers entertained. But the executive fail to keep pace with the rapid growth of online retailers and stubbornly held on to their old business model, which lead to the company’s current struggles. Maybe, Bed Bath should take a few lessons from Prada.
The beginning sign of Bed Bath & Beyond’s decline
The downfall of Bed Bath & Beyond can be drawn back to 2017 when same-store sales, the indicator of retail success, took a nosedive. Arthur Stark, former president of Bed Bath & Beyond, believes that the company should have focused on online retail and should have gone private to focus on e-commerce. Even if it meant temporarily sacrificing profits. The management had entertained the idea, but executives were too busy trying to balance the present market pressures with long-term investments, which now put the company in its current position.
The 20% off coupons that Bed Bath & Beyond sent to millions of households, to shower them with discounts were a double-edged sword. On one hand, they increase sales and made customers jump for joy. On the other hand, they cripple profits, and efforts to restrain the discounts only made things worse. While the company continued to struggle, activist investors started pushing for change. Which lead to the former CEO Steve templates abandoning ship. Even after multiple attempts to turn things around, including layoffs, management changes, boardroom shake-ups, and stock buybacks, the company still has not found a solution to its problems.
New CEO same ending result, bed bath and beyond closing its stores
Interim CEO sue Gove recently had a brilliant idea to fix Bed Bath & Beyond’s problems. Waste employees’ time by making them come back to the office for some good face time. However, the plan was met with suspicion from employees who thought the executive were living in their own world. Nonetheless, Gove made multiple bold decisions, by firing a fifth of its corporate and supply-chain workforce and closing 150 of its nearly 770 stores in the US. And with a smirk on her face, she announced that the company had secured new financing and was launching a holiday-shopping season turnaround plan.
Unfortunately, Bed Bath & Beyond’s moment of relief was just a cruel tease. The company is now preparing for a potential bankruptcy filing. What’s more interesting is the fact that the company is now skipping payments to banks and bondholders and is even playing a game of “Let’s Not Pay Our Employees Their Severance”. If or when the company decides to file bankruptcy, it might come out as a smaller version of itself. But let’s be realistic, with its terrible financial conditions it’s more likely to sell all of its assets and call it a day. The case of Bed Bath & Beyond is a great example of what can happen to a company in a fierce and competitive market. One thing we know for sure is that, once this is all done, many Americans are now going to live paycheck-to-paycheck. Check out the article for more.
