Bed Bath & Beyond may have new owners, but it seems the drama surrounding the brand the past few years—as well as the undue influence of money over merchandising—is far from over.
The sudden departure of CEO Jonathan Johnson earlier this week means that once the brand finds his replacement, it will be getting its sixth chief executive in five years. In that time, it has crashed and burned from its once-lofty heights only to reemerge under different ownership as the new identity for erstwhile online closeout retailer Overstock.com. To say there have been almost as many strategies as leaders in this period is not much of an exaggeration.
Johnson’s exit was unexpected in that he had steered Overstock in its acquisition of the BBB brand this summer at a bargain price of $21.5 million, and relaunched the company online in less than 45 days, converting what had been the Overstock.com site to the new name both in the U.S. and Canada. The company said it added more than 600,000 SKUs in the process, but its site still leans heavily on the furniture and home decor products that were its mainstay offerings before the takeover, and has been slow to add the bedding, bath and housewares merchandise that were its bread-and-butter back during BBB’s heyday. Johnson had told Business of Home in previous interviews that those products were coming, but that it was taking time to get them up and running on the site.
If Johnson had registered some notable achievements in the past 120 days, it was not being reflected in the company’s financial performance. In its most recent quarterly results, it continued to lose on both the top and bottom lines, and its customer count matrices were disappointing, seemingly not showing much improvement from the former BBB customer base. Again, Johnson said it was going to take time.
It is worth noting that Johnson had assumed the leadership of the company following a chaotic period when its controversial former CEO Patrick Byrnes seemed more interested in his fanatic support of both Donald Trump and cryptocurrency than in running a retail company. Johnson, an attorney by training and a longtime board member and senior executive for Overstock, stabilized the company and set it on its path toward a home-centric merchandising strategy that culminated in the Bed Bath & Beyond acquisition. Whatever happens next, he deserves credit for those accomplishments.
But apparently the company—now called Beyond Inc. as of this week’s official name change—has an investor who believed the time was right for a new approach. JAT Capital Management, which has about a 9 percent stake in the company, pushed for Johnson’s departure just last week, sending a letter to the company’s board saying, “the current CEO needs to be removed immediately” due to performing “poorly” and failing to communicate with investors and other stakeholders.
JAT said it would support bringing in current board member Marcus Lemonis—currently the CEO of Camping World but more well-known as the star of the CNBC business series The Profit—to run things. A Fast Company story on the suggestion quoted at least one financial analyst who said that was an unlikely outcome given Lemonis’s current demanding job.
In the meantime, interim CEO Dave Nielsen, who has been president of Overstock since 2019, says a search is on, both internally and externally, for a permanent leader. That would suggest Nielsen himself is a candidate, although there’s no telling what JAT thinks about him for the job.
Besides Lemonis, other board members with retail experience include board chair Allison Abraham (Shoppers Express) and Barbara Messing (Walmart). Deb Bollom, the chief merchandising officer, was previously with Target; Nielsen has at various times in his Overstock tenure run merchandising, sourcing and marketing. He was also a vice president of merchandise allocation at Payless ShoeSource for several years.
If the board decides to search outside the company, there are no doubt scores of potential job candidates—including, ironically, some of the people who once ran the original Bed Bath & Beyond. In the meantime, the company will be maneuvering for the all-important holiday season—one that Johnson told Business of Home would include significant promotional activity. Since his exit, the brand’s stock price has crept up a few ticks, but is still far short of the levels it reached in the exuberance right after the BBB acquisition.
Given the assorted twists and turns the brand has endured over the past few years, one can expect more of the same, at least in the short-term. Only one constant has remained through different owners, leaders and any number of business strategies: the iconic, ubiquitous and beloved big blue coupon.
Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.