Bed Bath & Beyond will continue to evaluate ways to cut costs as it reviews the company’s portfolio of retail banners. But the retailer will continue to invest in its core business including store operations, omnichannel functions and integration, and advertising to continue serving the loyal core customer base and to “broaden the tent” particularly to draw younger shoppers, Mary Winston, the company’s interim CEO, said at the corporate annual meeting.
She noted that Bed Bath & Beyond has for some time tested new store ideas and formats even as it expanded and looked at ways to integrate online and brick-and-mortar retail as the company sought to establish an omnichannel experience that could build sales among more digitally adept consumers. However, Winston noted that the company had been slow to implement new ideas it was testing. She said that the present management and a newly elected corporate board with fresh faces and broad retail experience could draw on tests previously launched and its own initiatives to establish fresh approaches to the Bed Bath & Beyond experience offered consumers.
Winston added that evaluation of the several banners beyond the main Bed Bath & Beyond format, including Cost Plus World Market, Harmon and buybuy Baby, remain subject to evaluation.
The company’s search for a new permanent CEO continues as well. She declined to give a timeline on when Bed Bath & Beyond would have announcements as to the disposition of those initiatives.
Winston did note that the company is evaluating inventory issues including those regarding the breadth and depth of store assortment, which may change as the company looks to align how it operates locations more closely with surrounding community demographics and opportunities. However, she said that Bed Bath & Beyond would work toward emerging from present evaluations as a more clearly and cleanly defined destination for housewares and home furnishings, and wanted to work with vendors to feature exciting new products in stores.
The company continues reviewing and rationalizing its cost structure, an effort that includes renegotiating leases and analyzing individual locations as well as banners for overall contribution to profitable sales and staffing.
On July 23, just days prior to the annual meeting, Bed Bath & Beyond said it would reduce its corporate workforce 7%, and that Eugene Castagna, president and chief operating officer, had departed the company. The retailer stated that the cuts followed a comprehensive review of its corporate office cost structure, one that led to its shrinking management ranks including vice presidents, directors, managers and professional staff.
However, Winston emphasized that the board and management is focused on transforming the company with the goal of making it a more dynamic retail operation and is intent on investing to achieve that end as a means of boosting long-term shareholder value.
Winston reiterated four priorities she introduced in the company’s first quarter conference call: stabilizing and driving top-line growth; resetting the company cost structure; reviewing and optimizing the company’s asset base, including the retail banners operated; and defining the organization’s structure.
Bed Bath & Beyond first quarter net loss was $371.1 million, or $2.91 per diluted share, versus net earnings of $43.6 million, or 32 cents per diluted share, in the year-prior period. Adjusted net earnings were $15.5 million, or 12 cents per share, versus $51.3 million, or 38 cents per share, in the year-prior first quarter. Comparable sales fell 6.6% in the period year over year. Net sales were $2.57 billion versus $2.75 billion in the year-earlier quarter. Operating loss was $406.8 million versus an operating profit of $81.2 million, in the year-previous quarter.