Bed Bath & Beyond begins its process of reinvention but much remains to be done



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The old bed Bath & amp; Beyond was notoriously stoic when it came to telling investors and the industry what she was going to do, remaining extremely opaque about her plans.

The new bed Bath & amp; Beyond does not have that luxury. Faced with a myriad of problems – including a straight-line net business figure, its first quarterly losses, an excessive inventory, an excessive number of stores under too many names and a supply chain that appears to have an anchor that drives it down – more open on what that is. It remains to be seen if this can solve all these situations, but at least we now know that they are trying.

In a letter to Bed Bath's shareholders and the public earlier this week, Interim CEO Mary Winston and Independent Chair Patrick Gaston presented in more detail the company's progress, including a large part focused on things to come rather than checkboxes. Nevertheless, this represented a radical change from their predecessors, and if its stock did not explode exactly, it would get at least a nice surprise, thus telling investors and analysts what they were hearing.

Here are the highlights:

The CEO Search: The company said it hoped to receive an announcement "in the coming weeks". The search did not reveal any leaks, and it is not known if Winston is herself a candidate. The company has been without a general manager since Steven Temares was forced to leave earlier this year under pressure from a group of outside investors.

Remodelings store: BBB said it would give about 160 of its 1,100 beds Bath & amp; Beyond the brand stores, a 'quick refresh' that will be 'clearly visible to the customer and will have a positive impact on the short-term in-store shopping experience'. This represents a substantial advance over previous programs, often limited to a handful. places. Nevertheless, it represents only a small portion of its fleet, especially since other retailers like Target, Walmart and even Macy's have been much more aggressive in their store renovation programs.

Inventory reductions: In what it describes as an "aggressive" campaign, BBB will reduce its inventories by up to $ 1 billion over the next 18 months, with at least a portion of its efforts being spent cleaning up the holiday season. Cluttered stores with an impressive range of assortments – often old and outdated products – have been a serious problem for the chain, and this should solve this problem, at least partially. But again, with annual sales of about $ 12 billion for all of its operations, this reduction represents about 8% of all of its operations. Nevertheless, this is progress, and the company suggests that much remains to be done in the management of its SKUs and its assortment of derivatives.

Divestments and closures: Confirming last week's reports, the company said it was working with Goldman Sachs and "other external advisors" to review asset sales and potential deals involving some of its smaller ones. divisions. It has been speculated that this list would include its brand Cost Plus World Market as well as a few others. Although the details were not mentioned, the release says that the company "is evaluating several different opportunities," which seems to indicate that there are offers on the table rather than simply signing for sale. A published report, which has not been confirmed by anyone, claims that Temares, the former CEO, ran a group that had bought Cost Plus.

The company also indicated that it hoped to accelerate "the process of closing its stores and / or relocation in the coming years". In the past, the company has been slow to close underperforming stores and previously announced closures have been minimal. at best, as a percentage of the total number of stores.

All these initiatives represent major changes for the company and their very mention is also a radical change. But to date, these are only work in progress. The company said it hopes for more updates when it publishes its figures for its next quarter in early October, but to date, no improvement in its fortunes has been identified.

Yet, this is encouraging news from a company that has been lacking for a long time.

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The former Bed Bath & Beyond was reputedly stoic when it came to telling investors and the industry what was going on, while remaining extremely opaque about its projects.

The new Bath & Beyond bed does not have this luxury. Faced with a myriad of problems – including a straight-line net business figure, its first quarterly losses, an excessive inventory, an excessive number of stores under too many names and a supply chain that appears to have an anchor that drives it down – more open on what that is. It remains to be seen if this can solve all these situations, but at least we now know that they are trying.

In a letter to Bed Bath's shareholders and the public earlier this week, Interim CEO Mary Winston and Independent Chair Patrick Gaston presented in more detail the company's progress, including a large part focused on things to come rather than checkboxes. Nevertheless, this represented a radical change from their predecessors, and if its stock did not explode exactly, it would get at least a nice surprise, thus telling investors and analysts what they were hearing.

Here are the highlights:

The CEO Search: The company said it hoped to receive an announcement "in the coming weeks". The search did not reveal any leaks, and it is not known if Winston is herself a candidate. The company has been without a general manager since Steven Temares was forced to leave earlier this year under pressure from a group of outside investors.

Remodelings storeBBB said it would "quickly refresh" about 160 of its 1,100 beds in Bath & Beyond stores, which will be "clearly visible to the customer and will have a positive impact on in-store buying in the short term." a substantial increase over previous programs that were often limited to a handful of locations. Nevertheless, it represents only a small portion of its fleet, especially since other retailers like Target, Walmart and even Macy's have been much more aggressive in their store renovation programs.

Inventory reductions: In what it describes as an "aggressive" campaign, BBB will reduce its inventories by up to $ 1 billion over the next 18 months, with at least a portion of its efforts being spent cleaning up the holiday season. Cluttered stores with an impressive range of assortments – often old and outdated products – have been a serious problem for the chain, and this should solve this problem, at least partially. But again, with annual sales of about $ 12 billion for all of its operations, this reduction represents about 8% of all of its operations. Nevertheless, this is progress, and the company suggests that much remains to be done in the management of its SKUs and its assortment of derivatives.

Divestments and closures: Confirming last week's reports, the company said it was working with Goldman Sachs and "other external advisors" to review asset sales and potential deals involving some of its smaller ones. divisions. It has been speculated that this list would include its brand Cost Plus World Market as well as a few others. Although the details were not mentioned, the release says that the company "is evaluating several different opportunities," which seems to indicate that there are offers on the table rather than simply signing for sale. A published report, which has not been confirmed by anyone, claims that Temares, the former CEO, ran a group that had bought Cost Plus.

The company also indicated that it hoped to accelerate "the process of closing its stores and / or relocation in the coming years". In the past, the company has been slow to close underperforming stores and previously announced closures have been minimal. at best, as a percentage of the total number of stores.

All these initiatives represent major changes for the company and their very mention is also a radical change. But to date, these are only work in progress. The company said it hopes for more updates when it publishes its figures for its next quarter in early October, but to date, no improvement in its fortunes has been identified.

Yet, this is encouraging news from a company that has been lacking for a long time.