Bed Bath & Beyond Announces Closures and New Strategies
When you own a business, you can never allow yourself to become stagnant, even if everything seems to be working perfectly. Over time, market conditions change, as do your customers’ desires and your competitors’ efforts to keep up. It is certainly important to keep doing the things that are working for your business, but it is equally important to recognize the parts of your business that might be slowing your growth. In practice, this could mean you need to make cuts in certain areas.
The good news, however, is by making strategic cuts when needed, you might be able to free up resources to use in other areas—areas that will help your company continue to be successful for many years to come. A good example can be seen in how the popular home goods chain Bed Bath & Beyond has handled recent struggles. By making a few tough decisions, the company seems to have set itself up for success moving forward.
Plans to Close 60+ Stores This Year
In October 2019, Bed Bath & Beyond Inc. announced that the company planned to close 60 stores across all of its brands. The New Jersey-based retailer also operates Christmas Tree Shops, Harmon Face Values, World Market, and BuyBuy Baby. In July 2020, however, in the midst of the COVID-19 health crisis, the company upped the number of planned closures to 200 locations over the next two years—“mostly” Bed Beth & Beyond locations, according to an earnings call reported by USA Today. Company officials said that the closures would save the company up to $350 million per year. Officials also acknowledged the impact of the pandemic, including sales lost as a result of temporary closures.
Last month, Bed Bath & Beyond listed the 63 locations that will be closed by the end of 2020. The closures will affect 29 states, with New York and California set to lose six stores each. Illinois will be losing four stores, including locations in Bolingbrook, DeKalb, Orland Park, and on North Broadway in Chicago.
New Strategies and Rebounding Numbers
As part of its efforts to streamline, Bed Bath & Beyond management turned their attention to online shopping, as well as cloud-based operations systems. The company has been encouraging customers to buy online and pickup in store, and to use curbside pickup. In select areas, the retailer is also partnering with Shipt (owned by Target) and Instacart to provide same-day delivery to customers’ homes. This option was announced last week and is expected to be used heavily during the upcoming holiday shopping season.
These changes seem to have sparked confidence in both shoppers and investors. In its second fiscal quarter report last week, Bed Bath & Beyond reported an 89 percent uptick in online sales over the previous quarter. The company also reportedly attracted 2 million new customers, many of whom were on the younger side and willing to spend more per transaction. Performance exceeded expectations in both overall revenue, which was $2.69 billion against an expected $2.60 billion, and earnings per share, which was $0.50 profit per share against an expected $0.23 loss per share.
Discuss Your Strategies with a DuPage County Business Planning Attorney
If you have ideas for improving areas of your business, it is important to work with a professional who can help you manage all of the details. Contact an experienced Hoffman Estates business lawyer to get the guidance you need today. Call 630-756-1160 for a confidential consultation at the Gierach Law Firm today.