Operating for over half a century, Bed Bath and Beyond Inc. (often referred to as BBBY) is one of the biggest omnichannel operators in the American big box store industry. At peak, it had over one thousand locations and more than thirty-two thousand employees.
The firm was counted as a Fortune 500 company and was a major player in the American homeware field for several decades – but, with the arrival, Bed Bath & Beyond seems to have fallen on difficult times. In line with this, it has perhaps come as little surprise that the firm has recently taken the step to apply for bankruptcy protection under Chapter 11.
What is Bed Bath and Beyond?
Bed Bath and Beyond is a specialist homeware and furnishings company, focusing particularly – as the name would suggest – on bedroom and bathroom furnishings. However, in more recent times, the brand also branched out into a wider array of products, such as kitchen appliances.
Factors Influencing Bed Bath and Beyond’s Decline
While there’s no simple way to ascertain why a company’s profits fall, there are several key factors that have likely influenced BBBY’s case. Some of the most notable challenges that the firm has faced include modernization and poor financing results.
Struggles to Modernize
BBBY has long considered itself a go-to destination for bedroom and bathroom homeware. In fact, at the outset, the firm’s core focus and USP was that it was a specialty store. Though this niche allowed the brand to grow very rapidly during its early days, reaching its peak around 2011.
However, as with all brands lately, Bed Bath & Beyond’s biggest struggle has come in the difficulty of modernizing. Indeed, the rise of online shopping has hit many businesses hard, and BBBY is neither the first nor likely the last to fall prey to the Internet’s potential. However, the damage has proven irreparable.
Due to the brand’s struggle to modernize, sales fell sharply. This led to some of its stores and workforce being shut off or fired in an attempt to prevent losses. However, the brand still faced difficulties in capturing the imagination of online audiences – irrefutably complicating matters further.
A further negative comes in the fact that the brand may have made bad investment choices as part of its model. The decision to invest in external companies – often with connections to the owners – is believed to have complicated the brand’s precarious financial position.
Drastic Action Following Financing Efforts
Another complicating issue arose with the brand’s financing efforts. An announcement earlier in the year did outline that the brand had achieved new financing goals; however, even with job cuts and store closures, this would prove ineffective in prolonging the company’s presence in the retail scene.
An Uncertain Future
Although BBBY has filed for bankruptcy protection under Article 11, the exact future strategy is unknown. Indeed, while Article 11 does allow the brand more time to meet its obligations, the fact remains that actual timelines have yet to be announced. Therefore, the business wind-down process is a little unknown, although recognition is given to the fact that all stores will close before July.