UNION, N.J., Sept. 4, 2019 /PRNewswire/ -- Bed Bath &
Beyond Inc. (Nasdaq: BBBY) today published a letter to shareholders
providing a strategic update on the Company's business
transformation efforts. The full text of the letter, which
can also be found at
http://bedbathandbeyond.gcs-web.com/investor-relations,
follows:
Dear Fellow Shareholders,
In recent months, we have initiated significant changes at Bed
Bath & Beyond, including at the Board level and across the
entire organization. Our objectives are to accelerate
improvement in our financial performance, enhance our competitive
positioning and ensure we have a best-in-class governance
structure. While in its early stages, the transformation
underway is advancing, and we wanted to share an update on the
progress we are making toward achieving these objectives.
The Board and management team are aligned around four key
priorities, which interim CEO Mary
Winston communicated during the Company's first quarter 2019
earnings conference call in July. These priorities include
stabilizing and driving top-line growth; resetting the cost
structure; reviewing and optimizing the Company's asset base,
including the portfolio of retail banners; and refining Bed Bath
& Beyond's organization structure. We are relentless in our
pursuit of short-term opportunities to effect meaningful change,
while laying the foundation for transforming our Company for
long-term success. Some examples are:
Stabilizing and Driving Top-Line Growth – A rapid refresh
of nearly 160 Bed Bath & Beyond stores is underway and is
expected to be finished in advance of the 2019 holiday season. We
expect this multi-million-dollar investment in physical
improvements to be clearly visible to the customer and favorably
impact the in-store shopping experience over the short term.
A longer-term comprehensive store renovation program, in
conjunction with further investments in our customer-facing digital
channels as well as marketing and loyalty initiatives, will further
the goal to delight our customers whenever and wherever they
experience our brand.
Resetting the Cost Structure – Cost savings from our
comprehensive lease renewal efforts and the corporate workforce
reduction announced in late July
2019, and certain other near-term actions, are expected to
collectively take tens of millions of dollars out of the cost base
of our business, increasing margins while also creating a more
effective organization to meet the needs of our customers today and
in the future.
Longer term, a substantial change in our sourcing and buying
approach to increase the penetration of our private-label offerings
should yield significant cost savings over the next
two-to-three years and provide further product differentiation and
a more favorable margin structure.
Reviewing and Optimizing Our Asset Base – An
aggressive reduction of up to $1
billion of inventory is expected to be executed over the
next 18 months, including the removal of excess aged inventory from
our stores anticipated before the 2019 holiday season. This effort
should allow us to quickly reset inventory levels in both our
stores and distribution centers, as well as refresh our assortment,
providing for newness and higher-margin products, all in an effort
to drive customer traffic and support top-line performance.
Also, we continue to evaluate our fleet to create a better
balance between our physical and digital presence within the
markets we serve, to deliver the shopping experience our customers
want. Furthermore, we expect to be able to take advantage of our
heavy lease expiration cadence over the next couple of years, to
close underperforming stores or relocate stores to improve sales
and profitability on a per-store basis.
While our near-term priorities are primarily focused on Bed Bath
& Beyond, we are also well underway with a review of the
strategic alignment of all of the other business concepts and are
assessing ways to better align or create value from these brands.
In order to streamline and expedite this strategic review, we moved
the reporting structure of all these other business concepts under
one leader in conjunction with our other corporate workforce
changes made in late July. While we cannot make any
assurances, we are working with outside advisors, including Goldman
Sachs, and are currently evaluating several different
opportunities.
Board Transformation – Nine new independent directors have
been appointed over the past few months, significantly reducing the
average tenure of our Board. The new Board brings rich
diversity of perspectives, backgrounds, ages, gender, race and
ethnicity and reflects the diversity of the Company's loyal
customers and dedicated associates.
Our directors are leaders in global retail, merchandising,
technology, logistics, finance and governance, and we believe that
our refreshed Board is well-equipped to provide an appropriate and
effective level of oversight and guidance as we move our Company
forward in partnership with our talented and highly dedicated
management team.
In this short time, we have also accomplished a great deal
toward building a best-in-class governance structure to help us
move more effectively toward our goals, including: appointing an
independent chair; reconstituting each of our Board committees;
appointing committee chairs and updating committee charters and
governance policies; and establishing a Business Transformation and
Strategic Review Committee to review and evaluate the ongoing
business transformation and make recommendations on how the Company
can best capitalize on and navigate the evolving retail
environment.
CEO Search - Substantial progress has been made toward
identifying the Company's next permanent CEO. With the
support of a leading executive search firm, the Board's CEO Search
Committee has undertaken a robust process to identify a leader who
has a multifaceted skill set, including transformation and
innovation experience in the retail sector as well as e-commerce
and marketing experience. The caliber of candidates is
outstanding, and we expect to be able to announce the hire of a
world-class CEO in the coming weeks who will lead the Company and
continue the transformation already underway.
As we continue to work toward executing on our business
transformation, we remain confident in the strength of our brand
and the future of Bed Bath & Beyond. Our focus on putting
the customer at the center of our transformation, supported by data
and insights, is intended to restore Bed Bath & Beyond to its
iconic status and improve the Company's competitive
position.
While our teams are moving rapidly to address many near-term
opportunities to stabilize the business and lay the foundation for
sustainable growth, these are just the first steps in the Company's
ongoing business transformation. Mary will give a more fulsome
update on the business activities supporting our strategic
priorities during our next earnings conference call scheduled for
Wednesday, October 2, 2019.
Thank you for your interest and support of Bed Bath &
Beyond.
Sincerely,
Patrick R. Gaston
Chairman of the Board of Directors
Mary A. Winston
Interim Chief Executive Officer
About the Company
Bed Bath & Beyond Inc. and
subsidiaries (the "Company") is an omnichannel retailer that is the
trusted expert for the home and heart-felt life events. The
Company sells a wide assortment of domestics merchandise and home
furnishings. The Company also provides a variety of textile
products, amenities and other goods to institutional customers in
the hospitality, cruise line, healthcare and other industries.
Additionally, the Company is a partner in a joint venture which
operates retail stores in Mexico
under the name Bed Bath & Beyond.
The Company operates websites at bedbathandbeyond.com,
bedbathandbeyond.ca, worldmarket.com, buybuybaby.com,
buybuybaby.ca, christmastreeshops.com, andthat.com,
harmondiscount.com, facevalues.com, ofakind.com, onekingslane.com,
personalizationmall.com, decorist.com, harborlinen.com, and
t-ygroup.com.
Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to, anticipated cost savings and the
anticipated announcement of the hiring of a permanent Chief
Executive Officer. Many of these forward-looking statements
can be identified by use of words such as may, will, expect,
anticipate, approximate, estimate, assume, continue, model,
project, plan, goal, and similar words and phrases. The Company's
actual results and future financial condition may differ materially
from those expressed in any such forward-looking statements as a
result of many factors. Such factors include, without limitation:
general economic conditions including the housing market, a
challenging overall macroeconomic environment and related changes
in the retailing environment; consumer preferences, spending habits
and adoption of new technologies; demographics and other
macroeconomic factors that may impact the level of spending for the
types of merchandise sold by the Company; civil disturbances and
terrorist acts; unusual weather patterns and natural disasters;
competition from existing and potential competitors across all
channels; pricing pressures; liquidity; the ability to achieve
anticipated cost savings, and to not exceed anticipated costs,
associated with organizational changes and investments; the ability
to attract and retain qualified employees in all areas of the
organization, including a permanent Chief Executive Officer; the
cost of labor, merchandise and other costs and expenses; potential
supply chain disruption due to trade restrictions, political
instability, labor disturbances, product recalls, financial or
operational instability of suppliers or carriers, and other items;
the ability to find suitable locations at acceptable occupancy
costs and other terms to support the Company's plans for new
stores; the ability to establish and profitably maintain the
appropriate mix of digital and physical presence in the markets it
serves; the ability to assess and implement technologies in support
of the Company's development of its omnichannel capabilities;
uncertainty in financial markets; volatility in the price of the
Company's common stock and its effect, and the effect of other
factors, on the Company's capital allocation strategy; risks
associated with the ability to achieve a successful outcome for
business concepts and to otherwise achieve its business strategies;
the impact of goodwill and intangible asset impairments;
disruptions to the Company's information technology systems
including but not limited to security breaches of systems
protecting consumer and employee information or other types of
cybercrimes or cybersecurity attacks; reputational risk arising
from challenges to the Company's or a third party product or
service supplier's compliance with various laws, regulations or
standards, including those related to labor, health, safety,
privacy or the environment; reputational risk arising from
third-party merchandise or service vendor performance in direct
home delivery or assembly of product for customers; changes to
statutory, regulatory and legal requirements, including without
limitation proposed changes affecting international trade; changes
to, or new, tax laws or interpretation of existing tax laws; new,
or developments in existing, litigation, claims or assessments;
changes to, or new, accounting standards; foreign currency exchange
rate fluctuations; and the integration of acquired businesses. The
Company does not undertake any obligation to update its
forward-looking statements.
View original
content:http://www.prnewswire.com/news-releases/bed-bath--beyond-provides-strategic-update-in-letter-to-shareholders-300911986.html
SOURCE Bed Bath & Beyond Inc.