Bed Bath & Beyond Plans New CEO Soon, Working on 'Aggressive' Inventory Reduction -- 2nd Update
September 04 2019 - 6:43PM
Dow Jones News
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)
Copyright (c) 2019 Dow Jones & Company, Inc.
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