luckysaver wrote: ↑January 24th, 2022, 3:15 am
BBB also owns Harmon Face Values (a no-frills drugstore without a service pharmacy department and clinical health & wellness services). Most HFV merchandise is also sold at BBB stores and website. There are only 2 locations in the Los Angeles area (in West LA on Pico Blvd across from Westside Pavilion and in Pasadena's Hastings Ranch next door to Ralphs) and the rest of HFV is out-of-state. Very simple layout for merchandise - snack foods/candy, travel & trial size, cosmetics, and toiletries along the walls, and about 12-14 aisles of other related cosmetics/beauty supplies, shaving supplies, first aid, OTC meds, and other health products. Prices are comparable to the big 3 (Rite Aid/CVS/Walgreens) but they don't get the foot traffic of the traditional drugstores because they lack a pharmacy. I don't think they're doing well since several BBBs shuttered in the Los Angeles area. HFV might survive if they get into the pharmacy business but it appears they are not even interested in having in-store pharmacies any time soon.
Bottom line, BBB and HFV are both dying for sure.
This was called out on a different thread - but at least one BB&B "remodeled" (using that phrase very loosely) to the new format is already closing in Irvine, not even 90 days after the grand reopening. This store has a new format for the Harmon department. They gave HFV even better placement - on the racetrack across from checkout - new fixtures and signage and eliminated all of the Harmon branding. Clearly it didn't work out. But when you say that you're spending over half a million per store to "convert" half your chain to the "new format" - and close a store that just received that investment one quarter later - it is a sign that they are in big trouble and desperate for cash to stay alive.
I still think 95% of the half million investment on this "new format" is the markdown expense of eliminating most of the old, stale, and expensive merchandise. Then they replace it with Walmart quality junk that is a quarter of the price, and hang cheap looking purple signage. The $250 sheet sets mentioned above are gone, but replaced by $40-$60 sheet sets that are generic and bland colors. It's going to take a lot of those $40 sheet sets to make up for the sales revenue from one $250 set even after a coupon is used on it (because nobody shops BB&B without a coupon which shows they have zero ability to establish the value of their merchandise to their customers).
The failure point is that Wall Street is demanding positive comps - they're replacing their core product lines with cheap stuff that is a quarter of the price of the original lines - but they have no strategy to get more customers in to make up for the price differences. It seems most departments in the store would require two to three times as many paying customers as they had before to break even on a comp basis - and if you're selling more units than before that means more labor to stock shelves and ring transactions - deleveraging the P&L.
I don't see how they make it to Christmas season 2022 without going bankrupt.
They don't have the best products.
They don't have the best prices.
They don't have the best service.
They don't have the best store environment.
They don't have the best locations (if anything the average customer will drive past multiple better run competitors before they even find a BB&B that has survived the last few rounds of closings).
There is no reason for the customer to shop there over Walmart, Target, Macy's, or WILLIAMS-SONOMA family of brands. I would say that each of those brands represents a "tier" of product BB&B sells. Lowest tier (the majority of the store now) is Walmart - and let's face it they're going to beat BB&B on lowest price tier. WILLIAMS-SONOMA is going to deliver better selection, service and price on the highest end products (since they aren't adding additional 20% markup to offset a 20% coupon). Each "tier" competitor runs circles around that "tier" of BB&B's businesses.
They're doomed.