Bed Bath & Beyond: Dying?

[pseudo3d]

They didn't immediately file for bankruptcy as soon as markets open, but might do so tomorrow. It just seems like a lot to ask for—Buy Buy Baby wasn't dumped like their other ventures (Christmas Tree Shops, World Market, Linen Holdings, Of A Kind, One Kings Lane) so I have to assume there's value in keeping that. But even if they put up the chain for sale, who's buying? PE isn't known for taking care of retail long-term.

[storewanderer]

I think the chain is done. If the way the "staying open" store in Reno looks is any indication- the closing stores actually have a better selection of merchandise...

[ClownLoach]

They didn't immediately file for bankruptcy as soon as markets open, but might do so tomorrow. It just seems like a lot to ask for—Buy Buy Baby wasn't dumped like their other ventures (Christmas Tree Shops, World Market, Linen Holdings, Of A Kind, One Kings Lane) so I have to assume there's value in keeping that. But even if they put up the chain for sale, who's buying? PE isn't known for taking care of retail long-term.

I think their executive hubris has unfortunately destroyed Buy Buy Baby. They reported negative comps there in the negative 20s. The expecting parents they needed to "hook" for years of repeat business are getting the same disappointment as BB&B customers, empty stores that don't have all the items they need while competitors like Target are expanding their baby sections. They kept insisting that Buy Buy Baby should not be sold or spun because BB&B supposedly could not stay in business long term without it. The executives probably could have generated enough cash to buy a few more years for the BB&B chain to finish their restructuring or closure, and at least some part of the organization would have survived and gone forward. This company was crippled by years of negligent, lazy leadership that refused to follow the best practices of the retail industry (planograms, distribution centers, automatic replenishment), failed to maintain a healthy and productive store fleet by closing underperforming locations, and maintained a stagnant assortment of stale product. Then they thought they could fix it all overnight and did a "Ron Johnson JCPenney" level change, the entire time explicitly stating "we aren't doing what JCPenney did."

[BillyGr]

They didn't immediately file for bankruptcy as soon as markets open, but might do so tomorrow. It just seems like a lot to ask for—Buy Buy Baby wasn't dumped like their other ventures (Christmas Tree Shops, World Market, Linen Holdings, Of A Kind, One Kings Lane) so I have to assume there's value in keeping that. But even if they put up the chain for sale, who's buying? PE isn't known for taking care of retail long-term.

Were they actually dumped, or was it more that they sold some of these off as they were doing better, and thus others were willing to buy them (where no one was interested in the BBB or BBB parts)?

Not sure as we don't have most of those locally, but the Christmas Tree Shops here always seems to be busy and has lots of stuff in it (save for a few empty shelves as they close out, say, the actual Christmas items), and there is usually a line of people waiting to check out (now that they set it up with a single line vs. separate registers).

[veteran+]

I truly believe that the genius gene has disappeared in the C Suite community in just about all businesses.

[ClownLoach]

They didn't immediately file for bankruptcy as soon as markets open, but might do so tomorrow. It just seems like a lot to ask for—Buy Buy Baby wasn't dumped like their other ventures (Christmas Tree Shops, World Market, Linen Holdings, Of A Kind, One Kings Lane) so I have to assume there's value in keeping that. But even if they put up the chain for sale, who's buying? PE isn't known for taking care of retail long-term.

Were they actually dumped, or was it more that they sold some of these off as they were doing better, and thus others were willing to buy them (where no one was interested in the BBB or BBB parts)?

Not sure as we don't have most of those locally, but the Christmas Tree Shops here always seems to be busy and has lots of stuff in it (save for a few empty shelves as they close out, say, the actual Christmas items), and there is usually a line of people waiting to check out (now that they set it up with a single line vs. separate registers).

I think they sold off Christmas Tree Shops at the same time they sold Cost Plus World Market.

[storewanderer]

They didn't immediately file for bankruptcy as soon as markets open, but might do so tomorrow. It just seems like a lot to ask for—Buy Buy Baby wasn't dumped like their other ventures (Christmas Tree Shops, World Market, Linen Holdings, Of A Kind, One Kings Lane) so I have to assume there's value in keeping that. But even if they put up the chain for sale, who's buying? PE isn't known for taking care of retail long-term.

Were they actually dumped, or was it more that they sold some of these off as they were doing better, and thus others were willing to buy them (where no one was interested in the BBB or BBB parts)?

Not sure as we don't have most of those locally, but the Christmas Tree Shops here always seems to be busy and has lots of stuff in it (save for a few empty shelves as they close out, say, the actual Christmas items), and there is usually a line of people waiting to check out (now that they set it up with a single line vs. separate registers).

I think they sold off Christmas Tree Shops at the same time they sold Cost Plus World Market.

My guess is they could not find a buyer for Buy Buy Baby who was willing to pay what they thought it was worth, and that is why they kept it. Now with their incompetent way of merchandising and running stores and a 20% comp sales drop the chain is probably not worth anything anymore.

Harmon is likely not worth anything to be sold to anyone.

I was surprised Christmas Tree was sold.

World Market I was not surprised was sold; and since being sold that asset looks like it is absolutely knocking it out of the park. For Christmas they did unbelievably well. Their stores had far more traffic than anticipated, they sold down on items, ran out of supplies like bags, and couldn't get rid of checkout lines no matter how hard they tried. All it took was restocking the stores with interesting items again. Not rocket science, but Bed Bath and Beyond ran that chain into the ground. Just think if Bed Bath and Beyond had kept it...

[ClownLoach]

Were they actually dumped, or was it more that they sold some of these off as they were doing better, and thus others were willing to buy them (where no one was interested in the BBB or BBB parts)?

Not sure as we don't have most of those locally, but the Christmas Tree Shops here always seems to be busy and has lots of stuff in it (save for a few empty shelves as they close out, say, the actual Christmas items), and there is usually a line of people waiting to check out (now that they set it up with a single line vs. separate registers).

I think they sold off Christmas Tree Shops at the same time they sold Cost Plus World Market.

My guess is they could not find a buyer for Buy Buy Baby who was willing to pay what they thought it was worth, and that is why they kept it. Now with their incompetent way of merchandising and running stores and a 20% comp sales drop the chain is probably not worth anything anymore.

Harmon is likely not worth anything to be sold to anyone.

I was surprised Christmas Tree was sold.

World Market I was not surprised was sold; and since being sold that asset looks like it is absolutely knocking it out of the park. For Christmas they did unbelievably well. Their stores had far more traffic than anticipated, they sold down on items, ran out of supplies like bags, and couldn't get rid of checkout lines no matter how hard they tried. All it took was restocking the stores with interesting items again. Not rocket science, but Bed Bath and Beyond ran that chain into the ground. Just think if Bed Bath and Beyond had kept it...

I'm sure a year ago there was a line of buyers for Buy Buy Baby, and at that time BB&B was dealing with activist investors begging them to sell. They refused to give in to the pressure. I noticed that during the whole "rebuild" of BB&B under Tritton there was really no mention of Buy Buy Baby - no improvements, no change in merchandising, nothing. Although the BB&B strategy of blowing up everything was a recipe for disaster - letting the most profitable segment of the business stagnate and go stale was just as harmful.

[storewanderer]

I'm sure a year ago there was a line of buyers for Buy Buy Baby, and at that time BB&B was dealing with activist investors begging them to sell. They refused to give in to the pressure. I noticed that during the whole "rebuild" of BB&B under Tritton there was really no mention of Buy Buy Baby - no improvements, no change in merchandising, nothing. Although the BB&B strategy of blowing up everything was a recipe for disaster - letting the most profitable segment of the business stagnate and go stale was just as harmful.

I think they needed the profits from Buy Buy Baby to help fund their destruction of Bed Bath and Beyond. I suspect the Buy Buy Baby business was performing pretty well. Now, 20% comp sales drop... not so much.

But I suppose that 20% comp sales drop is better than the 40% comp sales drop Buy Buy Baby would have had if they had decided to implement the BB&B "transformation" playbook on the baby division. So it certainly could be worse... I suspect the 20% comp sales drop is due to problems getting inventory. I wonder who may be interested in buying the baby division at this point. Probably some private equity.

[ClownLoach]

I'm sure a year ago there was a line of buyers for Buy Buy Baby, and at that time BB&B was dealing with activist investors begging them to sell. They refused to give in to the pressure. I noticed that during the whole "rebuild" of BB&B under Tritton there was really no mention of Buy Buy Baby - no improvements, no change in merchandising, nothing. Although the BB&B strategy of blowing up everything was a recipe for disaster - letting the most profitable segment of the business stagnate and go stale was just as harmful.

I think they needed the profits from Buy Buy Baby to help fund their destruction of Bed Bath and Beyond. I suspect the Buy Buy Baby business was performing pretty well. Now, 20% comp sales drop... not so much.

But I suppose that 20% comp sales drop is better than the 40% comp sales drop Buy Buy Baby would have had if they had decided to implement the BB&B "transformation" playbook on the baby division. So it certainly could be worse... I suspect the 20% comp sales drop is due to problems getting inventory. I wonder who may be interested in buying the baby division at this point. Probably some private equity.

The only thing that stands in the way now is the horrifically butchered "supply chain transformation" strategy which was applied to the chain under Tritton. I do believe that Buy Buy Baby was moved into the 3rd party operated distribution centers with BB&B. This could have been a great improvement for the company if they actually had the money to build their own DCs. The fact that they are using 3rd parties and having to pay for the handling of their merchandise is undoubtedly worse than the old model of letting the stores order their own goods and vendors ship direct. As such it may be difficult to unravel and separate the two brands now.

On top of that the trust factor is destroyed already because of the lack of inventory. Parents will not and cannot accept this. Reliability was probably one of the reasons Buy Buy Baby stayed afloat despite not having the best pricing - you could count on them to be in stock on everything you needed for a baby in an environment that feels cleaner and healthier than say a Walmart. The first time you go in and they don't have what you need then you will go elsewhere and not come back. The value of the brand is seriously harmed now; if they can sell it and minimize supply disruption then maybe in a few years they will be able to get a new generation of parents. But that is a large investment which means the chain will sell for a tiny fraction of what it could have received a few years ago when they needed to cash out.

If I remember correctly Babies R Us was also carrying Toys R Us USA and there was also talk of selling BRU to try to fix their debt troubles, but they did the same thing and tried to hold onto the baby operation. We know how that worked.