Bed Bath & Beyond: Dying?

Post Reply
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by storewanderer »

https://www.cnn.com/2022/06/28/business ... index.html

Some "analyst" is targeting this chain specifically saying they have cut the AC to save money. Obviously those of us who have been to many retailers know this is happening at multiple stores and it likely isn't to save money but for other reasons (state regulations, parts delays, etc.).

Beyond that I do agree with most of the rest of the article as to the current state of this chain.

I guess trying to copy Target wasn't such a great strategy was it (especially as Target is in the process of... well we will see what happens there before coming to any conclusions).
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by ClownLoach »

Looking at the balance sheet after the earnings release - they had to take out a quick $200M loan to end the quarter at only about $100M in cash on hand. A year ago they had over $1B in cash. They halted remodels - I wonder if they realized that money was being wasted when they announced store closing sales in locations that still had grand reopening banners up? And the new addition of all third party distribution centers were so expensive they basically reduced the gross margin by 25%, when such a process should have drastically improved margin? Who signed those contracts to pay such outrageous prices? All of this indicates that they were very close to falling into the abyss, never to return.

Also I'm surprised nobody is mentioning this is the second high profile Target exec to go out and run their own company and fail dismally. Although he had a stint at Apple between assignments Ron Johnson also failed trying to turn JCPenney into a Target department store. So many parallels between Tritton and Johnson a decade apart...
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by storewanderer »

ClownLoach wrote: June 30th, 2022, 9:46 am Looking at the balance sheet after the earnings release - they had to take out a quick $200M loan to end the quarter at only about $100M in cash on hand. A year ago they had over $1B in cash. They halted remodels - I wonder if they realized that money was being wasted when they announced store closing sales in locations that still had grand reopening banners up? And the new addition of all third party distribution centers were so expensive they basically reduced the gross margin by 25%, when such a process should have drastically improved margin? Who signed those contracts to pay such outrageous prices? All of this indicates that they were very close to falling into the abyss, never to return.

Also I'm surprised nobody is mentioning this is the second high profile Target exec to go out and run their own company and fail dismally. Although he had a stint at Apple between assignments Ron Johnson also failed trying to turn JCPenney into a Target department store. So many parallels between Tritton and Johnson a decade apart...
Target is a bit of a thing that is over hyped. Outside large metro areas, not many people care about Target and their stores typically underperform Wal Mart. So applying a Target formula to a retailer like JCP really really really didn't work, and applying that formula to BBB didn't work either. What is funny is one thing in common that happened at both JCP and BBB under these Target people was a significant conversion of the product mix to lower quality products... the difference at JCP is they kept the old JCP labels and lowered the quality, but at BBB this guy had to get consultants to develop new brands that looked so much like copies of Target stuff that you thought you were at Target.

I just wonder if this chain will even survive. It is not going to be easy. Maybe they can downsize to about 150 stores and turn themselves into a premium home superstore. They could perhaps get their act together and then start to re-expand if they figure out what they are doing. Also probably time to spin off Buy Buy Baby and just shut Harmon down because at this point Buy Buy Baby does not deserve to go down with this ship and they've mismanaged the Harmon side of the BBB Stores so badly the past couple years that they need to exit that line of business.
babs
Assistant Store Manager
Assistant Store Manager
Posts: 762
Joined: December 20th, 2016, 3:08 pm
Has thanked: 19 times
Been thanked: 64 times
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by babs »

ClownLoach wrote: June 30th, 2022, 9:46 am Looking at the balance sheet after the earnings release - they had to take out a quick $200M loan to end the quarter at only about $100M in cash on hand. A year ago they had over $1B in cash. They halted remodels - I wonder if they realized that money was being wasted when they announced store closing sales in locations that still had grand reopening banners up? And the new addition of all third party distribution centers were so expensive they basically reduced the gross margin by 25%, when such a process should have drastically improved margin? Who signed those contracts to pay such outrageous prices? All of this indicates that they were very close to falling into the abyss, never to return.

Also I'm surprised nobody is mentioning this is the second high profile Target exec to go out and run their own company and fail dismally. Although he had a stint at Apple between assignments Ron Johnson also failed trying to turn JCPenney into a Target department store. So many parallels between Tritton and Johnson a decade apart...
It's not just Target execs, it's Walmart executives too. These executives leave Target or Walmart and think they are the reason cor6.their companies success. Once they leave, they quickly realize Target or Walmart wasn't successful because of them but was successful in spite of them. Running these large chains takes more than one or two people. All those people behind the scenes are the reason for success or failure, it's not one person.
babs
Assistant Store Manager
Assistant Store Manager
Posts: 762
Joined: December 20th, 2016, 3:08 pm
Has thanked: 19 times
Been thanked: 64 times
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by babs »

storewanderer wrote: June 30th, 2022, 11:57 pm
ClownLoach wrote: June 30th, 2022, 9:46 am Looking at the balance sheet after the earnings release - they had to take out a quick $200M loan to end the quarter at only about $100M in cash on hand. A year ago they had over $1B in cash. They halted remodels - I wonder if they realized that money was being wasted when they announced store closing sales in locations that still had grand reopening banners up? And the new addition of all third party distribution centers were so expensive they basically reduced the gross margin by 25%, when such a process should have drastically improved margin? Who signed those contracts to pay such outrageous prices? All of this indicates that they were very close to falling into the abyss, never to return.

Also I'm surprised nobody is mentioning this is the second high profile Target exec to go out and run their own company and fail dismally. Although he had a stint at Apple between assignments Ron Johnson also failed trying to turn JCPenney into a Target department store. So many parallels between Tritton and Johnson a decade apart...
Target is a bit of a thing that is over hyped. Outside large metro areas, not many people care about Target and their stores typically underperform Wal Mart. So applying a Target formula to a retailer like JCP really really really didn't work, and applying that formula to BBB didn't work either. What is funny is one thing in common that happened at both JCP and BBB under these Target people was a significant conversion of the product mix to lower quality products... the difference at JCP is they kept the old JCP labels and lowered the quality, but at BBB this guy had to get consultants to develop new brands that looked so much like copies of Target stuff that you thought you were at Target.

I just wonder if this chain will even survive. It is not going to be easy. Maybe they can downsize to about 150 stores and turn themselves into a premium home superstore. They could perhaps get their act together and then start to re-expand if they figure out what they are doing. Also probably time to spin off Buy Buy Baby and just shut Harmon down because at this point Buy Buy Baby does not deserve to go down with this ship and they've mismanaged the Harmon side of the BBB Stores so badly the past couple years that they need to exit that line of business.
Can't think of a single chain that's fallen as far as BBB, and has successfully turned around. Once customers move on, they don't come back. There are plenty of other options for people to shop at.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by storewanderer »

babs wrote: July 1st, 2022, 8:33 am
ClownLoach wrote: June 30th, 2022, 9:46 am Looking at the balance sheet after the earnings release - they had to take out a quick $200M loan to end the quarter at only about $100M in cash on hand. A year ago they had over $1B in cash. They halted remodels - I wonder if they realized that money was being wasted when they announced store closing sales in locations that still had grand reopening banners up? And the new addition of all third party distribution centers were so expensive they basically reduced the gross margin by 25%, when such a process should have drastically improved margin? Who signed those contracts to pay such outrageous prices? All of this indicates that they were very close to falling into the abyss, never to return.

Also I'm surprised nobody is mentioning this is the second high profile Target exec to go out and run their own company and fail dismally. Although he had a stint at Apple between assignments Ron Johnson also failed trying to turn JCPenney into a Target department store. So many parallels between Tritton and Johnson a decade apart...
It's not just Target execs, it's Walmart executives too. These executives leave Target or Walmart and think they are the reason cor6.their companies success. Once they leave, they quickly realize Target or Walmart wasn't successful because of them but was successful in spite of them. Running these large chains takes more than one or two people. All those people behind the scenes are the reason for success or failure, it's not one person.
What former Wal Mart executives have taken the head position at a given company and caused it to fall based on a failed "reinvention?"

I am thinking of that former Wal Mart person who ran 99 Cents Only then ran (maybe still runs) Sprouts. But those two chains, were not exactly doing great before that person got to them. And at this point they are both still open... and the chains were not "reinvented" by that former Wal Mart executive the way these former Target executives seem to try to "remake" the chains they join.

I think this is more of a Target specific issue and Target attitude. And this type of thing is what will also cause Target's ultimate downfall too.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by storewanderer »

Went in again today. The store has so many out of stocks in the kitchen area it isn't even funny. Space literally empty of product. Also the household cleaning area, same story. Various areas with no products at all. Also tons of empty shelf pegs on the center aisle. They don't have a plastic shelf tag holder on those pegs either and I hit one of them while walking by mistake and received a nice bleeding gouge in my hand from it.

The front area with "Back to College" signs is largely empty of merchandise and most shelving has been removed.

The Harmon department is a complete mess, low stock on what they do have but thousands of out of stocks.

The bedding department specifically sheets is full of out of stocks.

The store had 5 employees in the store this afternoon and employees outnumbered customers. Not one employee greeted me or offered assistance.

Walked out while one of the customers was paying and the cashier was insisting they "enter their phone number" before they run their credit card. The customer resisted and the employee told them you have to do that before you can pay. The customer again resisted and the cashier relented, bypassed the prompt, and let the customer pay.

With this way this store looked the current quarter is going to be even worse than the last quarter. This used to be a busy high volume store.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by ClownLoach »

storewanderer wrote: July 1st, 2022, 11:14 am
babs wrote: July 1st, 2022, 8:33 am
ClownLoach wrote: June 30th, 2022, 9:46 am Looking at the balance sheet after the earnings release - they had to take out a quick $200M loan to end the quarter at only about $100M in cash on hand. A year ago they had over $1B in cash. They halted remodels - I wonder if they realized that money was being wasted when they announced store closing sales in locations that still had grand reopening banners up? And the new addition of all third party distribution centers were so expensive they basically reduced the gross margin by 25%, when such a process should have drastically improved margin? Who signed those contracts to pay such outrageous prices? All of this indicates that they were very close to falling into the abyss, never to return.

Also I'm surprised nobody is mentioning this is the second high profile Target exec to go out and run their own company and fail dismally. Although he had a stint at Apple between assignments Ron Johnson also failed trying to turn JCPenney into a Target department store. So many parallels between Tritton and Johnson a decade apart...
It's not just Target execs, it's Walmart executives too. These executives leave Target or Walmart and think they are the reason cor6.their companies success. Once they leave, they quickly realize Target or Walmart wasn't successful because of them but was successful in spite of them. Running these large chains takes more than one or two people. All those people behind the scenes are the reason for success or failure, it's not one person.
What former Wal Mart executives have taken the head position at a given company and caused it to fall based on a failed "reinvention?"

I am thinking of that former Wal Mart person who ran 99 Cents Only then ran (maybe still runs) Sprouts. But those two chains, were not exactly doing great before that person got to them. And at this point they are both still open... and the chains were not "reinvented" by that former Wal Mart executive the way these former Target executives seem to try to "remake" the chains they join.

I think this is more of a Target specific issue and Target attitude. And this type of thing is what will also cause Target's ultimate downfall too.
I agree about the Target specific attitude. They think that because of how they introduced concepts such as planograms 60+ years ago they are superior to other retailers and everyone else can improve their business by operating the exact same way. Problem is that they are not operationally even close to the way they were a decade ago, where store inventory accuracy was probably the best in retail because every single carton was scanned on entry, overstock was flagged and moved into backroom before it ever hit the sales floor, every out in the store was scanned/validated multiple times weekly, and a dedicated/fixed schedule overnight team addressed all aspects of merchandising except for system generated restocking pulls throughout the day driven by real time sales data. Their buyers sought out trends worldwide and were first to market with merchandise people would line up outside for even though they're a discount store. The real problem is that the folks who made Target what it was are not there now, and the people who are leaving Target now to run these other companies have no association (or sometimes no experience whatsoever) with the formerly world class merchandising, store processes and routines that made Target so great. They just happen to have the Target name and a title on their resume.

I would say that 99 Cents Only stores did improve their situation overall under the last CEO - before him they were teetering on the edge of bankruptcy and liquidation for almost a decade but now they are financially stable and removed from the perpetual list of "retailers most likely to go out of business.". Sprouts was slaughtered by Apollo, one of the most brutal hedge funds ever created. They make Bain Capital and others look like saints. If you look around more you will find some good examples of the Walmart corporate folks who have improved companies they've arrived at, especially from a financial balance sheet status. I'm guessing it has something to do with accounts payable and receivable. Walmart is famous for taking forever to pay their vendors, but if someone owes them money they'll hound them every hour of every day to pay up. Implementing such practices will improve the financial state of any company... For a while.......
Last edited by ClownLoach on July 18th, 2022, 7:42 am, edited 1 time in total.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by ClownLoach »

storewanderer wrote: July 17th, 2022, 10:26 pm Went in again today. The store has so many out of stocks in the kitchen area it isn't even funny. Space literally empty of product. Also the household cleaning area, same story. Various areas with no products at all. Also tons of empty shelf pegs on the center aisle. They don't have a plastic shelf tag holder on those pegs either and I hit one of them while walking by mistake and received a nice bleeding gouge in my hand from it.

The front area with "Back to College" signs is largely empty of merchandise and most shelving has been removed.

The Harmon department is a complete mess, low stock on what they do have but thousands of out of stocks.

The bedding department specifically sheets is full of out of stocks.

The store had 5 employees in the store this afternoon and employees outnumbered customers. Not one employee greeted me or offered assistance.

Walked out while one of the customers was paying and the cashier was insisting they "enter their phone number" before they run their credit card. The customer resisted and the employee told them you have to do that before you can pay. The customer again resisted and the cashier relented, bypassed the prompt, and let the customer pay.

With this way this store looked the current quarter is going to be even worse than the last quarter. This used to be a busy high volume store.
I actually wonder how quickly they wind up in Chapter 11. They have to be bleeding money just keeping the lights on and the rent paid (if it's even being paid?) It appears that they had to borrow $200M last quarter (where they lost over $250M) to keep the ship afloat. I doubt they will be able to continue borrowing promising a turnaround when they had to fire the CEO mid-turnaround... I wonder how bad their credit rating is now?
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed Bath & Beyond: Dying?

Post by storewanderer »

Was near BBB again late this afternoon. Parking lot deserted for close to an hour, no more than 5 customers in/out and not everyone bought something. World Market was equally dead but it is fully stocked with products at this location (high volume also).

I wonder how many weeks BBB can survive.
Post Reply