This is Bloomberg Business Week with Carol Messer and Tim Stenebek on Bloomberg Radio.
All right, we're going to switch gears a little bit because we have a great guest with us in studio here. I don't know if you've been on overstock dot Com today, Tim, but if you load that in, you're going to get redirected to the bed Bath and Beyond website because Overstock dot Com is now operating as bed Bath and Beyond in the US following the rebrand in Canada. And we are joined by the CEO, Jonathan Johnson in studio. Jonathan,
thank you so much for coming in today. I am currently shopping for some midcentury modern products on the website here. But also previously, while I was working, I did a video on bed Bath and Beyond and the title was bed Bath and Bankruptcy. How are you planning to leverage the assets and ip that you spent a little under twenty two million dollars on to leverage the brand without that same ending.
Yeah, that's a great question. You know.
We we've long liked and looked at bed Bath and Beyond as a brand and as a loyal customer base. We understand it's business fell on hard times. Our view is that management can kill companies, but none necessarily brands. And before we purchased the brand, we did some consumer research and we saw that in the home space, bed Bath and Beyond was still a top five brand, well known,
well trusted, and associated with home. Overstock, on the other hand, has a business model that really works, but a brand that was actually creating some headwind. We started two and a half decades ago as a liquidator, but it's been twenty years since we were a liquidator and a lot of our customers still were not and potential customers still were not associating us with home products, home furniture. They
were associating with liquidations. So we thought, why don't we take our great business model and this great consumer, iconic consumer brand that is bed Bath and Beyond, put them together and it allows us to really rebrand in a way that's a lot less expensive, a lot less time consuming. Hasn't really been done before, uh And when we did it started last month in Canada to test it, it really resonated.
Well, So let's see what's the impact on revenue.
Well, hard to know just yet.
We've been kind of quiet about the impact on revenue in Canada, but it was significant.
What is significant?
You know, I'm going to be I'm going to be very careful not to talk about We had our investor call last week. We didn't we didn't talk about it, but something significant enough that we wanted to rush and do this rebrand as soon as possible. In the US that going out of business brick and mortar stores just closed this weekend and we're up and run today. That I think that tells you that it's meaningful for us.
So I'm curious about the experience that people have shopping at the new bed Bath and Beyond versus the old bed Bath and Beyond and versus that Overstock. Is the experience that you're going to get when you visit Overstock's website now goes to bed Bath and Beyond. Is that a bed Bath and Beyond experience or is it an Overstock experience?
I think it's a mix.
And by the way, those customer sets have a lot of overlap in their behavioral demographic. You know today when you go to that site, it's gone from red the Overstock customer, to color to blue the bed Bath and Beyond color the Overstock logo is still there today.
I see it.
That's the rewards club logo.
Well, and it's the rewards club logo. We will sunset that over time. We just want our overstock legacy overstock customer to feel comfortable the taxonomy and the search will feel very comfortable, very familiar, or the over customer.
There's a little bit.
More promotion and prominence to bed bath and kitchen products sure, so that the bed Bath and Beyond legacy customer feels comfortable there, but it will really feel like both for a time, but morphing to bed Bath because that's who we want to become.
You've also got the classic tried and true bed Bath and Beyond coupon offerings advertised at the top of the page. That is part of what people thought was a potential downfall for bed Bath and Beyond. So how are you thinking about some of the things that made bed Bath and Beyond so well known. But also we're a little bit of a tailwind or headwind rather for them.
So we are a promotion We've always been a promotional company with with site sales, with coupons. As we do this rebrand launch. The coupons are big, they're bed Bath and Beyond.
Esque size over time.
They won't be that big always because our prices have been sharper.
But for that Bed Bath and Beyond.
Customer who has loved the coupon, what they really will love is the new bed Bath and Beyond mobile app. If you download that today, there's a nice coupon there. We will continue to push promotions that way. That's been a hugely successful thing for Overstock, and we want it to be that way for the new bed Bath and Beyond.
Bricks and mortar strategy, is there one?
Yeah, there is, and it's not to have it And so you know, we never say never, will continue to look at it. But we like our asset Light business model. We think part of what brought the prior Bed Bath and Beyond down was lots of leases, lots of inventory moving away from name band product to private label. We like our business model asset light, name brand.
Uh.
So we never say never, but we say never for now. If that moron makes sense.
That makes sense. But I do wonder because some of the products are so big, some of the products people would argue you need to be tried. How do you get the consumer past that?
So I think Overstock has done really well with that, and so for the typical bed and bath product linens, small appliances, kitchen where that seems like it will fit really well. What Overstock is historically been good at is area, rugs, sofas, patio furniture.
This is the beyond part. It is the beyond bed bath and Beyond. We're good at the bed and the bath, and I would say Overstock was the beyond.
And I would say it's a much bigger, better beyond now. The number of products that are available on the new bed Bath and Beyond site is much bigger and it's a lot of beyond and so so we think we've done well at that, even with the headwind of kind of this Overstock brand that didn't fit who we were. We think with bed Bath and Beyond, that headwind turns into a tailwind.
So, as you know, revenue at Overstock and formerly bed Bath and Beyond had been falling year over year. I know you won't give a specific but what inning would you say we're in when it comes to reversing that.
Well, I think the economy has been particularly tough for our industry. The pandemic was huge tailwind, you know, and everyone got that pandemic bounce, and then I think, well, the country may have avoided a recession. I think our industry did not. Furnithing and home furnishings have been in a recession. I think that's normalizing now to seasonal trends, but it's not back to normal as far as what people are spending their money on. It's still very much experiential.
It's it's going to the Taylor Swift concert. It's it's doing those kinds of things that will come back. And I think our playing offense during this lower time in our industry cycle, when the cycle comes back, we'll be able to slingshot out bigger and stronger.
How would you feel if you became a meme stock, a lot, bath and beyond.
We don't want to be a memestock.
We want to we want to perform based on on We want to be rewarded based on performance. So when it's time to change our ticker, I can tell you one ticker we won't use, and that's BBB Y because we don't want to go back to that place.
Yeah, how's the consumer right now?
The consumer is out there, Uh, they're looking.
For deals and so for example, around fourth of July. We had a great Fourth of July. We had a great Memorial Day. We expect to have a great Labor Day because it's big promotions that are going on. The consumer has money to spend, but they want to be careful and make sure they're getting a great deal.
Do you think there's going to be a.
Well, I'm hopeful there's.
Not, particularly since I think this industry has been in its mini recession as it is. By the way, I think some of the things that are fending off a recession, like higher interest rates, are actually pushing us back down. When mortgage rates goes up go up, people aren't moving. It means they're not buying more furniture. It means they're
not redecorating at the same level. So what keeps the country out of a recession ultimately is good for us, but short term it's probably a little makes it a little tougher.
It's really interesting to think about you guys being tied closely with the housing data that we cover as well. Thank you so much, Jonathan, really really appreciate your time joining us in studio today. Again overstock dot Com. If you load that up right now, you're going to see bedbath and beyond on your screen. Really interesting talking with the CEO Jonathan Johnson here. Thank you so much for that