Bed Bath & Beyond to Close 200 Stores
July 08 2020 - 7:17PM
Dow Jones News
By Maria Armental
Bed Bath & Beyond Inc. said it would permanently close
roughly 200 stores, a bet that the home-goods chain can ride out
the coronavirus pandemic by shrinking its bricks-and-mortar
footprint.
Bed Bath & Beyond, which operates roughly 1,500 stores, had
to shut many of its locations starting March 23 because of Covid-19
restrictions in the U.S. Despite a jump in online sales, the
company's overall revenue for the quarter ended May 30 plunged 49%
to $1.31 billion.
The decline was in line with the quarterly drops reported by
Kohl's Corp., TJX Cos. and other rivals during the period. Unlike
those chains, Bed Bath & Beyond was struggling to draw shoppers
and boost sales before the Covid-19 pandemic upended shopping
habits and the U.S. economy.
The company, which also owns the BuyBuy Baby and Harmon
drugstore chains, said most of the stores that will close over the
next two years are from its flagship chain. It had 955 Bed Bath
& Beyond locations as of May 30, so the closures represent
about 21% of those locations.
"The impact of the Covid-19 situation was felt across our
business during our fiscal first quarter, including loss of sales
due to temporary store closures and margin pressure from the
substantial channel shift to digital," said Chief Executive Mark
Tritton. "We believe Bed Bath & Beyond will emerge from this
crisis even stronger."
Mr. Tritton was named CEO last year after an activist investor
ousted most of the retailer's leadership, including the
co-founders. He has been trying to streamline the business and
declutter stores. The retailer's formula of stocking stores
sky-high with goods and using coupons to lure shoppers had become
outdated in a world where most of the products it sells are a click
away.
On Wednesday, Mr. Tritton said Bed Bath & Beyond had
converted about 25% of its stores into regional fulfillment centers
during the pandemic, nearly doubling its capacity to handle the
surge in online shopping.
Bed Bath & Beyond said nearly all of its stores are now open
and offering curbside pickup services. It said digital sales jumped
82% in the quarter, but those gains were more than offset by a 77%
plunge in sales at stores due to the closures.
The Union, N.J., company reported a loss of $302.3 million for
the quarter, compared with a loss of $371.1 million a year
earlier.
The company has been selling assets to raise cash for its
turnaround efforts. In January, it signed a deal to sell roughly
half of its real estate to a private-equity firm and lease back the
space. In April, it sold its One Kings Lane e-commerce site for an
undisclosed amount. Executives said after ending the May quarter
with about $1.2 billion in cash, they secured a new $850 million
asset-backed credit line.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
July 08, 2020 19:02 ET (23:02 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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