UNION, N.J. — Bed Bath & Beyond Inc. announced on Wednesday reforms intended to hasten its latest turnaround. The changes — including store closings, job cuts and a revamped merchandising strategy — are aimed at improving its balance sheet and cash flows, the company said.
The chain said same-store sales declined 26% for the three months to August 27, the steepest drop it has reported in years.
Bed Bath & Beyond said it has secured more than $500 million in new financing that would help steady its business heading the year-end holiday season.
“We are embracing a straight-forward, back-to-basics philosophy that focuses on better serving our customers, driving growth, and delivering business returns,” said Sue Gove, a company director who is serving as interim CEO. “We have made significant changes and instituted enablers across our entire enterprise to regain our dominance as a preferred shopping destination for our customers’ favorite brands and exciting products. We command a special presence in the home and baby markets, and we intend to fulfill our opportunity to be the category retailer of choice.”
Key elements of its merchandising shift include the introduction of emerging direct-to-consumer brands and bringing back popular national brands. An earlier turnaround effort, led by ousted former CEO Mark Tritton, featured an attempt to sell more private-label merchandise and an everyday-low-price emphasis that would allow the retailer to wean many shoppers from a reliance on ubiquitous 20%-off coupons.
Three exclusive brands — Haven, Wild Sage and Studio 3B — are being discontinued inventory of others are being significantly reduced.
In its latest turnaround push, Bed Bath & Beyond plans to close about 150 of its “lower producing” stores and reduce about its workforce by about 20%, including cuts in its corporate and supply chain operations.
A “first wave” of store closings should result in the shuttering of 50 or more stores by the end of the company’s fiscal year in February. Bed Bath & Beyond now has about 900 stores.
The company today announced the departure of Chief Operating Officer John Hartmann, said the his role, as well as the chief stores officer role, have been eliminated.
Other changes to its executive leadership team reflect the new strategic priorities, Bed Bath & Beyond said. Mara Sirhal has been appointed to executive vice president and brand president of Bed Bath & Beyond. And Patty Wu has been promoted to executive vice president and brand president of buybuy BABY.
The company said it is “in the earliest phase” of the process of hiring a new CEO.
“While there is much work ahead, our road map is clear and we’re confident that the significant changes we’ve announced today will have a positive impact on our performance’” Gove said on a conference call with investors.