UNION, N.J., Aug. 25, 2020 /PRNewswire/ -- Bed Bath &
Beyond Inc. (Nasdaq: BBBY) today announced a major realignment of
its organizational structure, estimated to generate future annual
pre-tax cost savings of approximately $150
million. This represents a portion of the anticipated
savings from the previously disclosed comprehensive restructuring
plan, which is expected to deliver annualized improvement in
Earnings before Interest, Income Taxes, Depreciation and
Amortization (EBITDA) of between approximately $250 million to $350
million, excluding one-time costs, over the next
two-to-three years.
The realignment will further simplify the Company's operations,
support investment in its strategic growth plans, and provide
additional financial flexibility. The changes will help fund a
number of growth initiatives to enhance the omni-always shopping
experience in store and online, building on the recent introduction
of Buy-Online-Pickup-In-Store (BOPIS) and Curbside Pickup services,
in addition to supporting plans to launch an array of new
customer-inspired owned brands in 2021 and deliver an end-to-end
transformation of the Company's supply chain.
Organizational Realignment
In conjunction with the organizational realignment, the Company
has implemented a significant workforce reduction of approximately
2,800 roles from across its corporate headquarters and retail
banner stores, effective immediately. This action is designed to
further reduce layers at the corporate level, significantly
reposition field operations to better serve customers in a
digital-first shopping environment, as well as realign technology,
supply chain and merchandising teams to support strategic growth
initiatives.
In line with previously disclosed statements, these
organizational changes are estimated to generate future annual
pre-tax cost savings of approximately $150
million, excluding one-time costs and a portion for
reinvestment, and is in addition to the expected $85 million in SG&A savings associated with
the strategic restructuring program announced in February 2020. The Company expects to incur
pre-tax cash restructuring charges of approximately $25 million in fiscal 2020, primarily for
severance and related costs in conjunction with these changes, all
of which will be expensed in the fiscal 2020 second quarter.
This action represents a portion of the anticipated savings from
the previously disclosed comprehensive restructuring plan, which is
expected to deliver annualized EBITDA improvement of between
approximately $250 million to
$350 million, excluding one-time
costs, over the next two-to-three years through a robust store
optimization project and annual savings from product sourcing
through renegotiations with existing vendors. In addition to
these cost savings, the Company expects to generate deeper
assortment, sourcing and supply chain opportunities as it pursues
growth in owned brands.
Bed Bath & Beyond's President and CEO, Mark Tritton said, "Saying goodbye to colleagues
and friends is incredibly difficult, but this component of our
comprehensive restructuring program is critical to rebuild the
foundation of our business, construct a modern, balanced and
durable business model, and meet the structural shift in customer
shopping and service preferences that we have seen accelerate as a
result of COVID-19. Today's action forms part of a series of
changes we are making to reduce the cost of our business, further
simplify our operations and support our teams so we can emerge from
the pandemic in an even stronger position.
"We have made significant progress this year and these
purposeful interventions are designed to allow us to maintain our
financial flexibility and re-invest where it matters most to our
customers and our people. As we work to re-establish our authority
in Home, Baby, Beauty and Wellness, we are encouraged by the strong
customer response to new services such as BOPIS and Curbside
Pickup, and the continued strength in our digital channels as we
improve the curation of our product assortment, enhance the ease
and convenience of the shopping experience, and make it easier to
feel at home."
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.
Non-GAAP Financial Measures
The Company is not providing a reconciliation of its estimate of
improved EBITDA as a result of the ongoing restructuring program to
the most directly comparable measure prepared in accordance with
GAAP, because the Company is unable to provide this reconciliation
without unreasonable effort due to the uncertainty and inherent
difficulty of predicting the occurrence, the financial impact, and
the periods in which the adjustments may be recognized. For the
same reasons, the Company is unable to address the probable
significance of the unavailable information, which could be
material to future results.
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
success of its cost restructuring program and estimates as to the
components thereof. 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; risks associated with COVID-19 and the governmental
responses to it, including its impacts across the Company's
businesses on demand and operations, as well as on the operations
of the Company's suppliers and other business partners, and the
effectiveness of the Company's actions taken in response to these
risks; 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, including the Company's strategic
restructuring program; 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, and other factors such as
natural disasters, such as pandemics, including the COVID-19
pandemic, 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; the ability to effectively and timely
adjust the Company's plans in the face of the rapidly changing
retail and economic environment, including in response to the
COVID-19 pandemic; uncertainty in financial markets; volatility in
the price of the Company's common stock and its effect, and the
effect of other factors, including the COVID-19 pandemic, 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. Except as required by law, the
Company does not undertake any obligation to update its
forward-looking statements.
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SOURCE Bed Bath & Beyond Inc.