After Chapter 11 bankruptcy and revamp, retailer makes big cuts
The struggling chain has been attempting a turnaround.
It's a difficult time to be a retailer.
The early 2020s brought a seemingly unprecedented amount of uncertainty to the sector, and though the worst may be behind us, plenty of retailers are still reeling from the changes.
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Few retailers were flush enough with cash or had the brand strength to withstand months of lockdowns and decreased foot traffic. Most large brick-and-mortar stores trudged through the past several years with dwindling profits and expensive debt.
Some even shuttered entirely.
Once-iconic stores like Express, Rue 21, Joann, Big Lots and Party City filed for bankruptcy. Some, such as crafts retailer Joann, are closing all stores permanently after being in business for over eight decades. Image source: TheStreet
Troubled retailer makes a major change
Some retailers, however, are making strong efforts to turn things around.
The housewares chain Bed Bath & Beyond, which filed for Chapter 11 bankruptcy protection in 2023, is under new management with Executive Chairman Marcus Lemonis at the helm.
Lemonis has been consolidating costs and working to return the company to profitability. One recent move is reducing the number of stockkeeping units — individual items in inventory for sale — that the retailer holds at once and reducing the number of vendors it works with.
As of December the retailer had more than halved the number of SKUs to five million from 12 million. It reduced its vendor count by 800.
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"We are exceeding our previously announced targets of margin improvement and fixed-cost reductions, improved site experience, and the elimination of poor-performing SKUs/vendors, which are all leading to our primary goal of making money," Lemonis said when the company reported fiscal-Q4 2024 earnings on Monday, Feb. 24.
There's hope for Bed Bath & Beyond
Lemonis remains optimistic about the future for Bed Bath & Beyond.
While the retail chain still has a ways to go — revenue for the fourth quarter fell 21% — it halved its net loss.
“We believe there are several months where we think there is a real good shot at reaching profitability in that specific month,” Lemonis said.
“I don’t think we’ll be profitable for the year. It is our goal. It is our hope. We’re going to do all the things that are necessary.”
He added that Bed Bath & Beyond's darkest days are over, so long as another black swan event doesn't occur.
"The worst is absolutely 100% behind us," he said, adding, "if the world stays the way it is today.”
Average purchases were up 20%, perhaps due in part to inflation. The average order placed during the most recent quarter was $181, up from $151 a year earlier.
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