Is Rooms + Spaces facing some of the same challenges that plagued the former owner of its stores? The home furnishings retailer created from the bones of Bed Bath & Beyond’s Canadian stores is going through a turbulent period.
According to a source with knowledge of the situation who spoke to Business of Home on condition of anonymity, the retailer is months behind on its payments to vendors and has stopped communicating about delinquent invoices. Meanwhile, former BBB executive Greg Dyer, who joined the company as president upon its launch, left in late November. Rooms + Spaces has not responded to multiple requests for comment.
The company came into existence in May, only a few weeks after Bed Bath & Beyond filed for bankruptcy and was on its way to liquidation. The U.S. stores were all shuttered, but the Canadian locations were bought by Putman Investments, an Ancaster, Ontario–based company run by entrepreneur Doug Putman, who also owns the Toys R Us and Babies R Us brands north of the border, as well as holdings in the music and entertainment fields. A total of 24 former Bed Bath & Beyond and Buy Buy Baby locations reopened under the new Rooms + Spaces name this past summer, stretching across Canada, with a cumulative total of 800,000 square feet.
“With so many empty storefronts across the country right now,” Putman said in the release announcing the new venture, “Canadians are craving enjoyable in-store shopping experiences, where they can see and touch products, especially when it comes to outfitting a home. I see such a strong opportunity to invest in Canadian retail, and I’m always looking for new opportunities. The creation of a new home brand was a natural addition to my retail portfolio, which now provides shoppers with everything they need across the baby, toy and home categories.”
Now, less than six months later, things may not be working out as planned. BOH’s source says that “receivables for vendors now sit 160 to 180 days past due, with no resolution in sight. The only amounts being paid out to vendors are cost price on goods actually sold, which equates to fractions of the overall inventory value.”
The source went on to say that Rooms + Spaces is not responding to requests for payment, and that they have heard “many vendors are already jumping to collect receivables insurance or send the account to collections.” BOH was able to confirm with three vendors that they had not been paid for recent orders. A fourth said that the retailer was making small weekly payments.
Dyer’s leaving is another ominous sign for the brand. A longtime Bed Bath & Beyond veteran, he was enthusiastic about the new company’s prospects. “I can’t wait to welcome shoppers into our new Canadian-owned Rooms + Spaces stores,” he stated in the launch press release. “Our team is excited about creating product assortments tailored to Canadian homes and decorating styles.” The executive declined to comment on his departure.
On Thursday, Rooms + Spaces sent out a letter to its vendors announcing Dyer’s exit, saying, “While we are saddened by his departure, we respect his decision and express our gratitude for his significant contributions to the company.” The letter is from Brian Tan, the company’s assistant vice president and head merchant, according to his LinkedIn.
The letter also includes a quote from Putman: “We remain committed to our vision, and I have full confidence in the team’s ability to drive Rooms + Spaces to greater heights in 2024.”
The other remains of Bed Bath & Beyond are experiencing varying degrees of success. Beyond Inc., formerly Overstock, just fired its president and is being pushed by a private equity firm investor to make changes, including bringing in turnaround specialist Marcus Lemonis (TV’s The Fixer) to run the company. Lemonis has agreed to be board chairman but has said he is not interested in the CEO job.
Meanwhile, the new owner of the Buy Buy Baby brand is reopening about a dozen physical locations and said it expects to eventually have as many as 100 stores back in business. Bed Bath & Beyond in Mexico was bought back by its previous joint venture operator and has about a dozen stores operating under that name in the country.
The saga of what becomes of the pieces of the once-great big-box giant continues …
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.