UNION, N.J., Feb. 27, 2020 /PRNewswire/ -- Bed Bath &
Beyond Inc. (Nasdaq: BBBY) today announced a strategic
restructuring program as part of the next phase of its work to
rebuild the foundation of the business and create a sustainable,
durable business model. The restructuring program includes a
reorganization and simplification of its field operations,
significant reduction in management positions across the business,
and outsourcing of several functions. As part of the program, Bed
Bath & Beyond today commenced a workforce reduction impacting
approximately 500 positions.
This is a major pivot in the Company's plan to realize several
hundred million dollars of cost saving opportunities over the
long-term. The overall restructuring program is expected to
reduce annual SG&A expense by approximately $85 million, as part of a strategic realignment
to create greater focus on the Company's core business and
initiatives designed to enhance the customer experience, drive
sales, and position the Company for long-term success.
Bed Bath & Beyond's President and CEO, Mark Tritton said, "We are announcing extensive
changes today to right-size our organization as part of our efforts
to reconstruct a modern, durable business model. We do not
take this action lightly but, while difficult, these measured and
purposeful steps are necessary. This will reset our cost structure,
allowing us to re-invest where it matters most to our customers, to
re-establish our authority in the Home space."
Reconstructing the Operating Model
Reinforcing the
Company's preliminary strategic plan, which includes action across
five strategic pillars: Product; Price; Promise; Place; and People,
Bed Bath & Beyond has been conducting a comprehensive review of
its business to determine ways to drive efficiency and
effectiveness.
The Company is now taking steps to reconstruct and modernize its
operating model, accelerating its transformation and balancing
near-term priorities to generate savings while reinvesting for
future growth. The restructuring program consists of a reset of the
cost structure that will:
- Simplify and remove spans and layers of management to bring the
Company in line with industry best practice;
- Remove duplicative or redundant roles to streamline the
organization;
- Reduce and realign regional zones to simplify and restructure
field operations; and
- Outsource several functions to allow the Company to focus on
core competencies.
In connection with this restructuring program, the Company
expects to incur net pre-tax charges of approximately $26 million, primarily for severance and related
costs, all of which will be expensed in the fiscal 2019 fourth
quarter.
About the Company
Bed Bath & Beyond Inc. and
subsidiaries (the "Company") is an omnichannel retailer that makes
it easy for our customers to feel at home. The Company sells a
wide assortment of domestic 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.
Forward Looking Statements
This press release
contains forward-looking statements, including, but not limited to,
the Company's progress and anticipated progress towards its
long-term objectives and the potential impact of its strategic
restructuring program. 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, although the
absence of those words does not necessarily mean that statements
are not forward-looking. 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; 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 its business concepts
and to otherwise achieve its business strategies; the impact of
intangible asset and other 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; and foreign
currency exchange rate fluctuations. The Company does not undertake
any obligation to update its forward-looking statements.
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SOURCE Bed Bath & Beyond Inc.