Bed Bath & Beyond to Close 40 Stores This Year

By Jeremy Sandberg

Bed Bath & Beyond will be closing a minimum of 40 of its stores this year, Chief Financial Officer Robyn D’Elia said in an earnings conference call on April 10.

“This number will grow unless we are able to negotiate more favorable lease terms with our landlords,” D’Elia said.

Bed Bath And Beyond customer
Customers carry bags from a Bed Bath & Beyond store in Los Angeles, Calif. on April 10, 2013. (Kevork Djansezian/Getty Images)

The company will open 15 new stores under its new “Next Generation Lab stores” in an effort to improve in-store customer experiences and increase revenue.

“The foundational initiatives that we have been focused on are intended to drive four key objectives,” Steven Temares, Chief Executive Officer, said in the conference call. “Mid- and long-term revenue growth, near term and ongoing gross margin improvements, near term and ongoing SG&A (selling, general and administrative expenses) improvements, and current and sustainable world class operational support.”

In the company’s press release titled ‘Results For Fiscal 2018 Fourth Quarter And Full Year,’ a net loss of $1.92 per diluted share ($253.8 million) was reported for the fourth quarter of 2018, with net sales of $3.3 billion. Comparable sales decreased 1.4 percent in comparison to the fourth quarter of 2017, with losses attributed to brick and mortar stores and not online sales, which showed strong growth.

Bed Bath & Beyond store
Bed Bath & Beyond store in Los Angeles, Calif. on April 10, 2013. (Kevork Djansezian/Getty Images)

Temares laid out the company’s strategy to stay competitive and increase revenue.

“Our efforts to drive mid- and long-term revenue growth is centered on several initiatives,” Temares said.

Temares listed the initiatives as concept strategies, including a greater focus on growing the assortment of categories in stores, next generation lab stores meant to provide visual merchandising and variety to enhance customer experience, front end optimization to support a better customer experience in digital channels, and value optimization to support the company’s commitment to competitive and markdown pricing.

Dissatisfied Activist Group

In a press release on March 26 from Bed bath & Beyond, a response was made to a group of investors referred to as the “Activist Group” after the group’s attempt to replace the entire Bed Bath & Beyond board of directors that includes CEO Temares.

Three groups of investors, Legion Partners Asset Management, Macellum Advisors GP, and Ancora Advisors had stated that collectively, they held a 5 percent stake in the company, and motioned to replace the entire board of directors with 16 nominees at the company’s annual shareholder meeting.

“Bed Bath & Beyond regularly engages with our shareholders and welcomes constructive input focused on enhancing value,” Bed Bath & Beyond stated in response. “Members of our Board of Directors and senior management team have met with and held several discussions with Legion and Macellum over the past few weeks. Ancora has not previously reached out to or engaged with the Company.”

Bed Bath & Beyond shopper
Customers shopping at a Bed Bath & Beyond in Los Angeles, Calif. on April 10, 2013. (Kevork Djansezian/Getty Images)

“We asked on several occasions for their suggestions and ideas for improving the Company’s business but they did not provide any,” said the press release. “We also invited them to participate in the Board refreshment program we have been undertaking in recent years and are in the process of accelerating with investor input. Instead they chose to publicly attack the Company and provide their intent to nominate directors to take over the full Board.”

The press release stated that the board is committed to the best interest of all shareholders and to the company’s strategic priorities.

“The Board recognizes the value of fresh perspectives and diversity in the boardroom and regularly evaluates its composition to ensure it reflects the right mix of skills and expertise,” said the press release. “Notably, as part of the Board’s ongoing refreshment program, three new independent directors with relevant experience have been added during the last two years.”

Shares of Bed Bath & Beyond rose as much as 30 percent after the “Activist Group” called for the change in the board of directors.