To simplify operations and cut costs, Bed Bath & Beyond has kicked off a strategic restructuring program that will include outsourcing and the elimination of 500 positions.
The company said the restructuring is part of the next phase in its efforts to rebuild the foundation of the operation and create a sustainable, durable business model.
Bed Bath & Beyond indicated that it is reconstructing and modernizing its operating model, as the retailer accelerates its transformation, balancing near-term priorities to generate savings while reinvesting for future growth.
The program builds around a reset of cost structure that will simplify and remove layers of management to bring the company in line with best practices; remove redundant roles to streamline the organization; reduce and realign regional zones to restructure field operations; outsource functions to focus the company on core competencies.
The company expects to incur net pre-tax charges of $26 million, primarily for severance and related costs, that will register as an expense in the 2019 fourth quarter.
The restructuring, the company noted, is an important part of its plan to realize several hundred million dollars of long-term cost savings opportunities. The overall restructuring program is expected to reduce annual SG&A expense by $85 million as the company focuses on its core business as well as initiatives designed to enhance the customer experience, drive sales and position it for long-term success.
Mark Tritton, Bed Bath & Beyond president and CEO, said, “We are announcing extensive changes today to right-size our organization as part of our efforts to reconstruct a modern, durable business model. We do not take this action lightly but, while difficult, these measured and purposeful steps are necessary. This will reset our cost structure, allowing us to re-invest where it matters most to our customers to re-establish our authority in the home space.”