Even as Bed Bath & Beyond reported strong first-quarter numbers earlier this week showing that e-commerce now accounts for 38 percent of overall sales, the brand remains laser-focused on its store fleet.
The big-box home furnishings retailer is in the middle of a massive reinvention to pare down the number of its marginal nameplates while fortifying its core mothership with a half dozen (and counting) private-label brands. The company is simultaneously undertaking a substantial reset of its physical footprint—it is on track to remodel 150 of its approximately 800 stores this year. As the strategy progresses, it will result in newer merchandising looks, fewer stores overall, and what the brand hopes will be a totally different shopping experience for in-store customers.
Speaking to Business of Home and in comments about earnings for the quarter, CEO Mark Tritton and other company executives laid out the progress the retailer is making on the long road back from its once-steady decline.
The first real test is taking place in the Houston market, where 11 stores have been remodeled, some substantially and some marginally. Tritton said it’s still too early to get a real read on store performance but added that average tickets were up and that overall, the company was pleased with the investment it made in these locations.
In the Dallas market, other stores are still works in progress, including one near the upscale NorthPark shopping center. This location, visited by BOH, is only about one-third completed, but a quick tour showed sight lines greatly expanded and the elimination of most of the merchandise “bays” that have traditionally characterized Bed Bath & Beyond stores. Fixturing is lower, signage is more clear and clever, and pricing specials are more prominent in a bid to overcome what the company has said is a struggle to communicate value proposition to shoppers. And while not enough of the Dallas store had been completed to see the overall impact, it was evident that the shopping experience would be a marked change from the stack-’em-and-rack-’em strategy of the past.
A real representation of the company’s vision will come in July, when it reopens what is essentially its flagship, the Chelsea store on Sixth Avenue in Manhattan. Its single-largest retail outlet, with about 100,000 square feet of space, the location is a New York shopping landmark, but had become a disorientating maze of confusing departments and aisles difficult to maneuver (much less shop) in. Tritton isn’t giving away a lot of secrets yet, but says when the store—which has been closed since December—reopens on July 22, it will set the statement for the entire company.
In the meantime, Bed Bath & Beyond is about halfway through its three-year plan to close 200 of its stores. Under prior management, the company was one of the last large national chains still expanding in an over-stored marketplace, and has said this new reduced fleet will bring it more in line with today’s shopping patterns.
Finally, its Buy Buy Baby division, which has taken a backseat so far, has continued to put up impressive numbers, with sales up 20 percent this past quarter, even compared with a year ago, when its stores remained open. Tritton says consumers will start to see more things coming from this unit as it rolls out new initiatives. With forecasts of a possible post-pandemic spike in births in 2022, this brand could be in the right place at the right time.
Tritton says being “omni-always” is the overriding strategy for Bed Bath & Beyond going forward, but it’s clear that its physical stores remain a priority in what is shaping up as one of the bigger transformations in modern retailing history.
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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.