Bed Bath & Beyond Plans New CEO Soon, Working on 'Aggressive' Inventory Reduction -- 2nd Update

   By Maria Armental and Josh Beckerman

Bed Bath & Beyond Inc. (BBBY) intends to clear up to $1 billion of inventory and refurbish stores, an aggressive resetting of spending priorities to help rekindle business and appease investors.

Part of that push will be a "rapid refresh" of nearly 160 Bed Bath & Beyond stores ahead of the holidays, a key sales period for retailers, along with clearing away some old inventory.

Bed Bath & Beyond, which emerged as a housewares superstore with more than 1,500 locations, has been criticized for overrelying on coupons to draw shoppers and a "pile it high" mentality for stores that made them cluttered.

In all, the company estimates it will aggressively eliminate nearly $1 billion worth of unsold items over the next 1 1/2 years. In addition, without giving specific numbers, the company said it would close stores that have fallen short of expectations and relocate others, taking advantage of the large number of leases that were coming up for renewal over the next couple of years.

While Bed Bath & Beyond remains the short-term focus, the company said it was working with outside advisers, including Goldman Sachs Group Inc.

In addition to the namesake brand, Bed Bath & Beyond also owns the Harmon drugstore chain, Christmas Tree Shops, buybuy BABY and other chains.

Under pressure from investors, which ultimately led to the resignation of its chief executive, Bed Bath & Beyond overhauled its board to include nine new independent directors and a yet-to-be named chief executive.

On Wednesday, the New Jersey-based company said it would appoint a "world-class CEO" in the coming weeks and said it expected to shave off "tens of millions of dollars out of the cost base" while improving margins through the job cuts that were announced this summer, the lease-renewal program, and other unspecified "near-term actions."

The lower cost structure, it said, should improve margins. An overhaul of the sourcing and buying approach to focus on private-label offerings should drive significant savings over the next two to three years.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

September 04, 2019 18:28 ET (22:28 GMT)

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