In a call discussing the retailer’s Q2 financial results, Interim CEO Mary Winston said Bed Bath & Beyond could close as many as 60 stores by March 2020, the end of its 2019 fiscal year. The company originally had projected closing a total of 40 stores, but now will shutter 40 Bed Bath & Beyond stores and 20 other concept stores. The retailer operates a total of more than 1,500 stores, including 993 Bed Bath & Beyond stores in all 50 states.
Bed Bath & Beyond also plans to trim approximately $350 million in inventory from its brick-and-mortar stores before the 2019 holiday season, “through a series of markdowns and clearance events and with the assistance of an independent liquidator, all to be managed thoughtfully to prevent cannibalization of sales,” said Winston. Bed Bath & Beyond recently revealed in a shareholder letter that it plans to reduce $1 billion of inventory at retail over the next 18 months. As a result of this decision, the retailer took a $194 million inventory write-down in Q2.
Another move to cut costs includes renegotiating leases for its stores: “In many cases, we have been able to achieve more favorable lease terms and landlord contributions and occupancy savings from these efforts are expected to benefit fiscal 2019 and beyond,” said Winston.
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Bed Bath & Beyond is focusing its efforts on its top-performing stores. The retailer is “already underway with a rapid refresh of almost 160 of our highest volume and most profitable Bed Bath & Beyond stores to improve store traffic trends, drive sales and reset the store experience,” said Winston.
Q2 results reveal the company’s current financial struggles. Net sales for the period were $2.7 billion, a 7.3% decrease compared to the same period last year. Comparable store sales declined by 6.7%.
The retailer has had a rocky 2019. In April, activist investors succeeded in removing Bed Bath & Beyond co-founders Warren Eisenberg and Leonard Feinstein from the retailer’s board of directors, followed by the resignation of CEO Steven Temares in May. In July the retailer announced a 7% corporate staff reduction and the elimination of the COO role. Bed Bath & Beyond is still on the lookout for a permanent CEO, although a company statement indicated that the retailer has made “substantial progress” and expects to make an announcement soon.
