Bed, Bath and Bye Bye: Company is officially in default

ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 289 times
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by ClownLoach »

storewanderer wrote: March 19th, 2023, 1:12 am I heard 9-10 days ago 150 more stores were closing. Is there a list?

Or is this 150 you are talking about that same 150?

I also heard they have moved up the timeline on stores currently in liquidation to shut down. There is a lack of merchandise. The liquidation firms are having to supplement with a lot of their own merchandise to keep customers even interested in the liquidation sales. A lot of the stuff the liquidators are bringing in are the weird things Kmart used to sell in 2021-2022 in weird brands nobody ever heard of like Home Basics or Bradshaw or other very odd random brands.

This chain will need to rebrand if it plans to stay in business based on the way it has been dragged through the mud for the past couple years. Liquidators bringing in random weird off brand stuff isn't helping. In that regard they were better self liquidating.
After the wave 4 closure of 150 stores, which has been in process for a while now, they were supposed to have about 350 BB&B stores left and they would try to move forward on that (they have zero credibility IMHO but that was the statement). Now supposedly the company is looking for cash again and will roll a 5th closure wave of another 150 BB&B stores.

I think they're just going to wind down all the BB&B format and reorganize in bankruptcy court to emerge with only the Buy Buy Baby banner. I also wonder if some of the BB&B closures may have been with the intention of severing the lease in bankruptcy and renegotiating to reopen the site as a Buy Buy Baby. Obviously they would need an investor partner such as a PE firm to successfully reorganize but if they have any shot at doing so this is the way. I do not see how they can resurrect the BB&B nameplate with all the damage that has been done to the brand.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by storewanderer »

I wonder if they can keep Baby going also- it relied on BBB for various buying, consumables buying was done by Harmon which I guess is now dead, and BBB for systems/support.

I think the customers have moved on from BBB and the chain is done. Too many closures, too many merchandising screw ups, just too much confusion. Also the bed/bath category seems a bit odd in general; I'm not sure if people just buy less bed/bath stuff than they used to or what but that category seems to be struggling at a lot of retailers. Kitchen seems to be a great category for stores with the right items. More and more I have trouble finding "that item" I want locally and just end up ordering on Amazon when it comes to Kitchen items.

What is the smaller 200 store BBB chain going to be modeled after? The new blue prototype? Some other new prototype? Their Reno store looks like it is going out of business, it has so so little merchandise and sales volume is almost nothing. They are being hounded on some "conversion" metric where some system tracks how many people walk into the store in a day and how many transactions they do and they get a "conversion" metric and of course the metric is very low due to the lousy product availability but that isn't the store's fault. They've focused on that metric for years but for some reason lately they are really pushing it again for some reason.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 289 times
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by ClownLoach »

storewanderer wrote: March 19th, 2023, 8:42 pm I wonder if they can keep Baby going also- it relied on BBB for various buying, consumables buying was done by Harmon which I guess is now dead, and BBB for systems/support.

I think the customers have moved on from BBB and the chain is done. Too many closures, too many merchandising screw ups, just too much confusion. Also the bed/bath category seems a bit odd in general; I'm not sure if people just buy less bed/bath stuff than they used to or what but that category seems to be struggling at a lot of retailers. Kitchen seems to be a great category for stores with the right items. More and more I have trouble finding "that item" I want locally and just end up ordering on Amazon when it comes to Kitchen items.

What is the smaller 200 store BBB chain going to be modeled after? The new blue prototype? Some other new prototype? Their Reno store looks like it is going out of business, it has so so little merchandise and sales volume is almost nothing. They are being hounded on some "conversion" metric where some system tracks how many people walk into the store in a day and how many transactions they do and they get a "conversion" metric and of course the metric is very low due to the lousy product availability but that isn't the store's fault. They've focused on that metric for years but for some reason lately they are really pushing it again for some reason.
I think this is a perfect example of a category that Amazon and the other big boxes has eaten alive. The majority of these items in decor, textiles etc. are easy to produce at a rapid pace and as such they are susceptible to online trends on Pinterest and Instagram that link right to the "hot new trendy item" on Amazon. The smart customers know that unless you are buying some kind of luxurious silk something or another the quality of a Costco or Sam's Club towel or bedsheet set is better than anything else you'll get for half the price. Then Walmart and Target take the middle and low end of the market along with the trendy throwaway stuff on Amazon. They did own the high end where customers didn't care about price but abandoned that range entirely; now if you want really luxurious overpriced bedding I guess Macy's and Bloomingdale's are your place. I wouldn't be surprised if their bed/bath businesses are up double digits since the Tritton fiasco began.

These are never items that are urgent need unless you just moved into a house and literally don't own any towels or bedding, and as such they are ideal for online shopping along with big boxes. My perception is that despite rapid fire inflation the core bed and bath category basics at Target and Walmart have stayed the same or even become cheaper last couple of years; this is probably intentional behavior as they worked to smother what's left of BB&B while they were also busy destroying themselves.

It seems in the desperate search for cash the company has liquidated most, if not all, of the newest prototype and remodeled stores. There is nothing in common in the remaining open stores that I can identify in my market. So if they were to get down to 200 stores they'll still have the same problematic hodge-podge of mismatched small, large, old and new stores that all require some form of capital investment. This is why I am assuming that there is no go forward plan for the BB&B stores. Some of these stores finished remodeling in November and began liquidation in December. It's complete chaos and newly remodeled stores in high visibility/high traffic locations closing is a sign of desperation. I read some BB&B employees arguing on Reddit that this is a good thing somehow and that just because a store is busy and has a lot of sales doesn't mean it's a profitable store... If their model is so broken that the highest volume stores aren't the most profitable (meaning they do not have any cost leverage as an organization) then they need to just pull the plug. The fact they employ leaders who have such little understanding of business acumen such as the concept of leverage is frightening.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by storewanderer »

ClownLoach wrote: March 19th, 2023, 8:57 pm

It seems in the desperate search for cash the company has liquidated most, if not all, of the newest prototype and remodeled stores. There is nothing in common in the remaining open stores that I can identify in my market. So if they were to get down to 200 stores they'll still have the same problematic hodge-podge of mismatched small, large, old and new stores that all require some form of capital investment. This is why I am assuming that there is no go forward plan for the BB&B stores. Some of these stores finished remodeling in November and began liquidation in December. It's complete chaos and newly remodeled stores in high visibility/high traffic locations closing is a sign of desperation. I read some BB&B employees arguing on Reddit that this is a good thing somehow and that just because a store is busy and has a lot of sales doesn't mean it's a profitable store... If their model is so broken that the highest volume stores aren't the most profitable (meaning they do not have any cost leverage as an organization) then they need to just pull the plug. The fact they employ leaders who have such little understanding of business acumen such as the concept of leverage is frightening.
That is the same logic that was applied in the Kmart bankruptcy 20 years ago. Why are so many stores in 10-15 year old buildings in growing/safe suburbs closing while 35 year old stores in bad neighborhoods are staying open? Oh, because those newer stores had high cost leases oh and those leases even had escalation clauses (presented to employees as if that was some kind of an odd/extraordinary thing in leases.. it isn't) so results would get harder and harder in the future to achieve... so they were not as profitable as the old stores... and forecasted to be even less profitable in the future.

There are obviously fluke situations where a busy store is not profitable (like those super high theft Wal Marts) but that should not be the norm.

I'm not sure what is up with those BBB employees on Reddit. Is it a bunch of store managers or middle managers who actually think that somehow this operation has a chance long term? From what I read there I get the impression they have cut all but management down to part time status and many long tenured employees have been let go.
Romr123
Assistant Store Manager
Assistant Store Manager
Posts: 693
Joined: February 1st, 2021, 4:26 pm
Has thanked: 37 times
Been thanked: 56 times
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by Romr123 »

Wandered through Palm Springs CA...did notice current planogram for summer being set up right inside the front door. Merchandise looks reasonably good. Lots of "burlap screens" about, though...store's in reasonable shape and seems to get a good amount of shoppers.
buckguy
Store Manager
Store Manager
Posts: 1003
Joined: January 31st, 2017, 10:54 am
Has thanked: 3 times
Been thanked: 61 times
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by buckguy »

They're still sending 20% coupons by text.
rwsandiego
Store Manager
Store Manager
Posts: 1242
Joined: April 3rd, 2016, 10:57 pm
Has thanked: 23 times
Been thanked: 55 times
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by rwsandiego »

Two of the Phoenix stores that are being kept have been recently remodeled.

I was perusing their website yesterday and came across this gem when looking at immersion blenders:
blender.jpg
Just for laughs, I checked it out. Here's the description:
blender 2.jpg
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 289 times
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by ClownLoach »

storewanderer wrote: March 19th, 2023, 9:07 pm
ClownLoach wrote: March 19th, 2023, 8:57 pm

It seems in the desperate search for cash the company has liquidated most, if not all, of the newest prototype and remodeled stores. There is nothing in common in the remaining open stores that I can identify in my market. So if they were to get down to 200 stores they'll still have the same problematic hodge-podge of mismatched small, large, old and new stores that all require some form of capital investment. This is why I am assuming that there is no go forward plan for the BB&B stores. Some of these stores finished remodeling in November and began liquidation in December. It's complete chaos and newly remodeled stores in high visibility/high traffic locations closing is a sign of desperation. I read some BB&B employees arguing on Reddit that this is a good thing somehow and that just because a store is busy and has a lot of sales doesn't mean it's a profitable store... If their model is so broken that the highest volume stores aren't the most profitable (meaning they do not have any cost leverage as an organization) then they need to just pull the plug. The fact they employ leaders who have such little understanding of business acumen such as the concept of leverage is frightening.
That is the same logic that was applied in the Kmart bankruptcy 20 years ago. Why are so many stores in 10-15 year old buildings in growing/safe suburbs closing while 35 year old stores in bad neighborhoods are staying open? Oh, because those newer stores had high cost leases oh and those leases even had escalation clauses (presented to employees as if that was some kind of an odd/extraordinary thing in leases.. it isn't) so results would get harder and harder in the future to achieve... so they were not as profitable as the old stores... and forecasted to be even less profitable in the future.

There are obviously fluke situations where a busy store is not profitable (like those super high theft Wal Marts) but that should not be the norm.

I'm not sure what is up with those BBB employees on Reddit. Is it a bunch of store managers or middle managers who actually think that somehow this operation has a chance long term? From what I read there I get the impression they have cut all but management down to part time status and many long tenured employees have been let go.
The thing is that BB&B stores are not really very large and are all about the same age. They grew very fast and then seemed to hit a wall. So their leases shouldn't be that far apart in cost. My experience with similar footprint stores in similar centers across a large territory is that there is no more than about a $5K range from lowest to highest rent. There possibly could have been leverage problems at a couple of larger higher rent outliers like the flagship two story megastore by LAX (massively remodeled 2021, liquidated late 2022), but the traffic there should have made it work (next to the #1 volume Costco in California). I do not believe that rents should have played a part in 99% of the closures.

For fun, apparently the store level P&L is kept under lock and key at BB&B. Only upper management had access to the actual profitability of stores. The SM had no idea. This should be another Gigantic red flag, just like the nonsensical choices of go forward locations.

I totally understand what happened to Kmart where they were a fleet of old, cheap, and old again stores from the 70s then they tried to lease a bunch of newer larger format stores in more expensive areas in the late 90s. They really needed a completely different format to make the newer/more expensive buildings work financially but they were basically selling all the same old Kmart junk (plus Fleming groceries in Super Ks) so the customers of the newer/better/more expensive areas rejected them in droves.

I do not feel that BB&B is comparable; the majority of their fleet all opened in the same 10 year window of mid 90s to mid 00s.

Newer, more focused category killers like BB&B have all been built on the same model of deep buying power and economy of scale. The model was the oldest and most established/most dense markets will be the bread and butter of the company delivering the most volume and fattest operating profit margin. Then they can leverage the profits to venture out into smaller/newer areas and be there as they grow (or leave if they flounder) because they are backstopped by the core fleet. In looking at the closures, I see those core bread and butter stores closed, stores again that were sometimes just a few weeks out of their remodel, and outer fringe market stores kept which appear to be in newer/likely more expensive centers. It makes no sense at all, and again if their model was so screwed up that there isn't any leverage as volume grows then that's why they're teetering on bankruptcy.

The Reddit thing seems to be mostly stock shills pretending to be working there and talking about how fantastic everything is and how much money the shareholders are going to rake in when the stock goes to the moon, and then the few managers who frankly can't get another job elsewhere or they would have already run for the hills. These folks make some of the strangest arguments I've ever read, and seem to be force fed horse manure right from the corporate office's barn. They're being told wacky things at the stores like "any lease can be canceled cost free as long as you just abandon the store and send back the keys" and "there is a clear path to profitability with the hand selected go forward stores" and "we only closed money losing, low volume stores." We all know you can't just walk away from Long term leases, they didn't seem to have enough cash from the ape stock bailout to last a quarter at their recent rate of cash burn, there is very little merchandise in the stores and customers aren't buying because they are waiting for a perceived going out of business sale to begin, and finally it is very obvious when the busiest flagships in the best centers close while the crummy location next to a closed Kmart is kept clearly different criteria were used in site selection (like amount of inventory on hand for highest up front cash return from liquidators). I mainly read it because it's like a train wreck, you can't look away from the stupid nonsense being posted.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by storewanderer »

I've tried to ignore the whole stock shill situation but yes. I suspect most on Reddit aren't actual employees. I forgot all about the stock meme thing already.

Has the store P&L always been under lock and key at BBB or is that a recent development in the past couple of years?

I do follow some logic on the store closures I've seen occur but not much. Like in my area- the store still open in Reno is the central location near the part of town with the most retail activity. It was the largest of the locations. In theory that should be the most viable store for them if they only want to keep one store. The next closest store now in Roseville is across from a solid A mall, a very large store, and is a super busy area and this should be a very productive location for them. But when I look at store closures in a region like SoCal I see no logic, it is just a total hack job there. Low volume stores remain open, very high volume stores closed, stores do not appear to be strategically spaced apart, there is no logic.

Kmart did own some real estate on newer stores. The real estate on the Reno location built in 1995 was owned; the real estate on the Carson City location built in 1994 was leased though. Not sure about in CA. After years and years of sale-leaseback transactions and with how things progressed for Kmart in the 90's, I think by the early 00's, property owners who had a newer early 90's Kmart in their building were really hoping Kmart would go away so they could find a tenant or multiple tenants who would pay more rent and bring more traffic around.

These BBB locations I am not really sure how many potential tenants are going to be banging on the door of the landlord asking to lease the space. I feel like these may be harder sells.
veteran+
Valued Contributor
Valued Contributor
Posts: 2233
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1202 times
Been thanked: 71 times
Status: Offline

Re: Bed, Bath and Bye Bye: Company is officially in default

Post by veteran+ »

If one is to believe the latest headlines about BBB future empty buildings.........................

Many are already in talks about it including Ross, TJMax, Planet Fitness and others.

🤷‍♂️
Post Reply