Bed Bath & Beyond

But the coupons and return policies that initially brought customers to stores soon hit their expiration date on effectiveness, leaving management grasping for straws on how to turn the company around and learning the hard lesson that more isn't always better and all these aren't always goodies. This is I can't believe I have to say this, Bed Bath and Beyond on Business on the Brink. Hey, everybody, after that alliterative opening, I am Jonathan Strickland and I'm Aero Caston,

and you did a really good job on at one take. Yeah, yeah, that's I mean, you know, rubber baby, buggy bumpers. What can I say? So this was a suggestion from somebody whose name I think I recognize, well, i'd hope so, because you know them, it's my mom. Hi mom, don your mom suggested this. My mom suggested that she listens to the show every week. So thanks mom, Thanks thanks

Ariel's Mom. Yeah. So we're going to cover Bed Bath and Beyond, a company that has a similar sort of history as some other big box retail companies have had, but there's some particulars in this one. They get awfully juicy. Also, Um, one of the things I think we need to start off with is the first note you have here. It's about the founders, the two founders being at Warren Eisenberg and Leonard Feinstein, who founded the company in nineteen seventy one.

Before we go anywhere in this episode, I just want to point out it pays to be the kid of the two founders of Bed Bath and Beyond for reasons we will get into this episode. Yes, Um, you know, like it pays to be the kid of someone who listens to your podcast because they give you good suggestions. Anyhow, not quite the same. Uh So. Yes, Warren and Leonard founded the first bed Bath and Beyond in ninete in Springfield, New Jersey, and at the time it was just bed

and Bath. Yeah, there's there's no beyond yet. No. No, they were not like Buzz Lightyear say. It was only when they when they hired a young promising Buzz Lightyear to join the company that they got. No, they literally were selling bed and bath items, so there was no call for a Beyond yet. So then in nineteen seventy seven, they you know, so they've been operating this for a few years now, they bring in a guy called Arthur

Stark to head the company as president. Right to act as president for the company, they the founders would essentially stay on as members of the board of directors for almost the entire history of Bed Bath and Beyond. Yeah, and we see this oftentimes someone will start a company and they'll run it by themselves for a little bit until they go, well, I really need a professional in right this this concern has grown to the point where

it is beyond my expertise to manage it. And so you bring in somebody else to come in and run the show while you still oversee the general direction of the company. Yeah, so things were going really well. Like they continued to grow as a company over the seventies and into the eighties, right, Yeah. By five, they expanded to seventeen locations and they opened their first superstore, and that's that's when they changed their name to Bed Bath

and Beyond. Because they started selling the Beyond. Yeah, the stuff that was not easily fitting wouldn't easily fit into the better bath. I mean so at the time, primarily kitchen stuff. Yeah, and you know they'd go into deck or in other things. Uh, but that that took some

finag links. So, and this is right around the time where superstores were really starting to take off as a concept in the mid eighties, like they had come out originally in the seventies, but this is when you started seeing other types of stores kind of following in those footsteps, and uh, and this is one of them. So by one they had they were doing around a hundred thirty four million dollars in revenue and sales. Uh. And then the following year they became a publicly traded company and

they were trading stock on the NASDACS. Yes, we're going through it quickly because for a while, uh, that bath thing beyond just did really well. They were making one point nine billion dollars a year, a significant jump in just a few years. So yeah, they they were doing this largely by growing rapidly, opening up new stores. They were being very uh aggressive in expansion at that point. And this is we haven't even really opened up that can yet because we're really they really got crazy in

the following decade. Yes, by the end of two thousand one, they had almost four hundred store locations and hopes to grow to up to eight hundred. Wow. Yeah, So here's the thing, growing like that, having that sort of aggressive growth strategy, opening up new stores, like actually scouting out locations and either building a structure or taking over a

vacant structure. That takes a lot of effort. There is another way to grow your business quickly beyond building it yourself, and that is buy it, yes, acquiring other stores and companies, And that's what bed Bath and Beyond did. So they did a bunch of research. From what I read, they actually were very careful in their first acquisition. They wanted to buy something that could fit in well with their current brand, wasn't going to be a direct competitor for them,

and had good operating margins in long term growth. Right, So I didn't want to go out and buy a company that was just going to cut into their own sales. You didn't want to have, you know, two stores in the same shopping center, for example, that are competing for the exact same customers. You're not doubling your sales that way, You're just dividing where your customers are going. So this was a very smart move on their part. It was. And in two thousand two they made the first acquisition.

It was Harmon's Stores. And when I was trying to figure out who Harmon was, there is a grocery line in Utah that is also named Harman's Stores. Turns out that's not the right the right one, right, No, No, Harmon. The Harmon they bought was a health and beauty retailer in New Jersey, where they also were. Yeah, and since we're down here in Atlanta, Georgia, often these regional chains or regional stores are ones that we may not have

ever encountered. Yeah. So, so we don't know how much they bought Harmon four, but we do know it was a cash acquisition. Bed Beth and Beyond has been fairly private about a lot of their financials, so as much as they can be so pretty opaque. Yes, yes, um, but Harmon's at the time was operating seven stores in three different states, and they had this was the big

thing for Bed Bath and Beyond. They had their own HB a line Harmon Face Values, and that meant that bed Bath and Beyond could take this this private brand and move it into their store because they didn't have HB A but HbA fits right in when with Bath. So this way they could actually carry a brand that no other store in their space could carry apart from Harmon's, apart from Harmon's which they owned hotly as a subsidiary.

So well, and then they that went so well that first acquisition that they said, well, shoot, we're professionals at this, let's really open up them purse strings and start buying stuff. Yeah, but the next thing they bought. It took me a while to figure out why. Because the next thing they bought was the Cris Smiths Tree Shops in two thousand three for two hundred million dollars, which added another twenty

three subsidiary stores in five states to retinue. Now here's the weird thing is that Christmas Tree Shops is a sporting goods store. I'm lying, you are lying. I didn't I didn't look. I assume they sell Christmas trees and and like Christmas decor and things like that, ornaments and things like that, which if you go into a Bed Bath and Beyond now, because we all know that they are not absolutely Toys r US right now, well kind of like Toys r US was a year ago as

of the recording of this episode. By the time this episode comes out, we don't know. Yeah. Yeah, you know they do put Christmas ornaments in Christmas decor and their stores as it's seasonally appropriate to do so. Yes, which means that since we're recording this at the beginning of September, probably tomorrow, the start putting them out. Yes. So by two thousand four, Bed, Bath and Beyond had sales of five point one billion with a B dollars. So I

guess it's time to make more acquisitions. Yeah. Now, this next acquisition is one where I object strenuously to the name of the company, which is Bye Bye Baby, Buy Buy Baby, So I guess you buy babies there. That to me is incredibly problematic. No, you don't buy babies, you buy buy things for babies. It was a competitor to Babies r US. Yeah, and they bought it for

sixty seven million dollars. Uh. And also part of that was to pay off some of Bye Bye Baby's debt, which was like almost twenty million at that point, Yes, Bye Bye Baby only had eight stores in four states, and the CEO of bed Bath and Beyond at the time Stephen Tamaris, who had been with bed Bath and Beyond ninety two. He became CEO in ninety seven and then CEO in two thousand three. He called the acquisition an excellent strategic fit, with the idea that a lot

of their customers are either perspective or current parents. But here's the thing, Okay, here's where I was saying, it pays to be the kid of one of the founders of bed Bath and Beyond. Yes, because the person who owned Bye Bye Baby was the son of Leonard Feinstein, one of the founders, And so there were a lot of people who said this acquisition wasn't so much a strategic acquisition as it was an effort to bail out the son of a founder of bed Bath and Beyond.

Because again, if you remember, we mentioned that part of that acquisition involved paying off nearly twenty million dollars in death. Yeah. Yeah, Now, two thousand seven also saw international expansion, so I mean, it's still good things even with this alleged buyout. They alleged bailout because it was indefinite buyout. You're right, Jonathan, you're very smart. Now shut up. No, please don't please,

don't shut up. I don't want to do this alone. Uh. So they opened their first are in Canada, and the next year they expanded into Mexico City through a partnership with Home and More. Uh and Home and Moore would eventually change a name to that Bath and Beyond. Yes, so now they are occupying all of North America. And in two thousand and eight, it was great news for bed Bath and Beyond, but bad news for somebody else.

The the business lenens in things, which you could view as the lex luthor to bed Bath and Beyond Superman. I mean, they definitely had a real close shave in two thousands. So they didn't just have a close shave, they actually closed up shop. The company went totally bankrupt. They liquidated their assets. They sold off all their brick and mortar stores. There were five hundred seventy one of them at the peak. Yeah. Now, granted they didn't sell them all off at once. It was a long, slow,

painful march towards bankruptcy. And they were really the only competitor in the big box retail space for this type of stuff that bed Bath and Beyond was doing. And there were other companies that were selling stuff that bed Bath and Beyond also sold, but Lens and Things was the only one really dedicated to the exact same space, and now they were gone. So now bed Bath and

Beyond was operating without a real competitor in that space. Uh. Lenons and Things, by the way, would re emerge in two thousand nine as a web based retailer, but would ultimately shut down for good Z's in two thousand eighteen. So maybe at some point we'll do another story, or maybe we'll just say, hey, do you remember that episode of bead Math and Beyond? Just do a fine copy of replace with things, which is not really the case.

Very different stores now, and I mean bad Beth and Beyond would soon get a bunch of competitors, but we aren't there yet. By two thousand and eleven, they're making nine point five billion dollars so much money. Yes, And by two thousand twelve they made two more acquisitions. Okay, and uh what were those? Well? The first was cost Plus Incorporated or cost Plus World Market, which I love for four you love it for four dollars? I love it.

They bought it for four dollars, But if I had four hundred million dollars, I might just be like, okay, this one cost plus, give me all your stuff, fair enough, okay. And then after that they bought Linen Holdings ll C for a hundred five million, right yes, And Linen Holdings did more industrial distribution, so bed bath and tableware and linens and textiles to things like cruise lines, food service hotels. Yeah, like all the hospitality industry and that kind of stuff

as well. Got you. So we are now at a point where we're kind of at the peak of bed Bath and Beyond in two thousand eleven, which was not that long ago, really wasn't. And yet we're about to enter into an era where things would go radically in a different direction. But before we get there, I think we need to take a quick break, all right. So we're back, and we're back with bed Bath and Beyond,

and now we're up to two thousand thirteen. We were still jumping forward a bit and things were still going like gang busters. They had five subsidiaries at that point. And they even though they had five subsidiaries, bed Beth and Beyond like the core business still accounted for the

majority of their revenue. Yeah, over their stores where Bed Bath and Beyond stores because these other acquisitions were small when they got them, and more regional, yeah, like the like the New Jersey's chains and stuff like that, so they grew them, but they also used them to grow

their business and expand their offerings. This is also when we started seeing I mean, obviously the companies were about to mention have been around for a while, but we started seeing companies like Target and Walmart and Amazon compete more fiercely in the same space as Bed Bath and Beyond. Yeah. Yeah.

But despite that, in two thousand and thirteen, they were up to eleven point five billion dollars in sales, and it looked like they might actually be able to take a stand against all of these extra big box stores, which is what I'm going to call them, yeah, some of them being online big box stores. Yeah. Amazon. And part of it was attributed to the fact that the company was very fiscally conservative up to this point other than buying the the subsidiaries, so they had very little debt.

And even when they were acquiring these other companies, they did it at a time where they said that it wasn't going to affect their bottom line for that year. Whether or not that's actually the case, we don't know, because they don't really break out these other companies and

their financials. They lump them all together. Oh yeah, that's one of the issues that we will revisit as well, is that when it came to financial reporting, they weren't They wouldn't break this down by here's how much this particular subsidiary brought in, here's how much this subsidiary brought in, here's how much bed bath and Beyond brought in. They would group them all together, and so it made it very challenging to understand what parts of the company were

doing well and which parts might not be doing So. Yeah, Now, another part they thought that was leading to their success was the longevity of their leadership. You know, the founders are still on the board. They had a very long standing CEO and a very long standing president and just and you know, we've tosked so many times about how you would have like a rapid change in executive leadership

and that could result in doom for the company. So, you know, you would think that having the same leaders in place for a long time could really help guide a company. But here's the here's the thing is that sometimes stuff changes and you need to have leadership that can adapt to change. And if you're comfortable, you may not notice that change. And if you're a company that makes acquisitions in order to bail out the children of founders, which would happen again, that's that's uh, it can be

an issue, but we'll we'll, we'll get there. So Ben Beth and Bon also has aggressive buyers who who really I would say they could squeeze blood from a stone, like they're really good on getting distributors to agree to really good sales prices and things like that. So so they were going out to to the providers of whatever, like the companies that are making these products and being able to get them at a really good price, and then of course mark it up to sail cell to

the final customer. And they made a lot of demands to those manufacturers and distributors. But they those manufacturers and distributors also got a lot of of you know, push for their products, so it was a given take they were willing to meet a lot of those demands. They also looked from some reports that I read for instead of looking for prime retail space. They looked for affordable

retail space. Now, whether it was affordable enough or not, I don't know, But in other words, they were looking for things like they were trying to balance out, Uh, does this space makes sense? Like if we paid this premium amount for this space, we might be in a much more visible spot, but we may not see a good return on that investment as opposed to let's go, you know, maybe three blocks over to a spot that's not considered quite as as valuable, but at the same

time will make a better return. Yeah, I get it. And then, of course there's one other component we have to talk about, because anyone who's ever shopped at bed Bath and Beyond and put their email registered their email with bed Bath and Beyond knows about the coupons. Yes, these these coupons got a lot of people into the stores. I know, I'm married to one of them. I mean, I usually go, oh, bead Bath and Beyond coupon. I'm

going to go to Bad Bath and Beyond. I'm sure there's something I need or want, and then I forget the coupon at home, and then I'm not signed up for the electronic coupons. Well I am now, but I wasn't, so I go in and I wouldn't actually have a coupon. Regardless, these coupons would give you like five off your entire order, your most expensive item, some really good deals. They were very lenient with the expiration dates yes, extremely sick yes,

and also very lenient with a return policy. You could return an item to anywhere used or new, um, well, any bed, Beth and beyond. Like you couldn't return to Target exactly. You walk into a game stop and say, I want I want some money back for this toilet brush I bought. Yeah, And they thought that they had

this coupon plan figured out. Well, they were going to factor the discounts into their pricing, so they could do pricing that was a little bit higher because people would be using the coupon to bring it back down yeah

yeah um. And then they would also weigh that with the amount of people that they thought were going to pay full price for items, like me, when I'd go in because I forgot my coupon, but I still wanted the mega coupon ers who have that stack ready to get at any moment, because they would also stack coupons for a while. Yeah. Yeah, if you ever saw any of those shows about like the crazy coupon ing type stuff like this is one of the company nis that was a frequent like it would frequently pop up on

that sort of thing. Yes, Um, but I think I think we've talked too much about coupons, so we'll move on. So we get over to this this part where Bed Bath and Beyond has been doing really well, and they've been, you know, trying to attribute that success to several different things. But we're now getting to the point where where we're about to have the tilt right. Yes. Yeah, So in two thousand fifteen, they planned to open thirty more stores across all their properties, so not just bed Bath and

Beyond stores. Um, and they made a bunch more acquisitions. So they bought of a kind in two thousand and fifteen, one kings Lane and personalization Mall in two thousand sixteen. One kings Lane. That's the one that's in Kingsman right that. You know, I can't disprove it because I don't know what one kings Lane self. Call me out, John. I'll like to think of that as the store where all

the Kingsman stuff takes place. I know it's not, but just anyway and personalization all was like this little niche online things. They're like, Okay, we're gonna we're gonna, yeah, we're gonna dip our toe in the online yeah. Um. And then they bought cheft Central and the Chorus in two thousands seventeen, and a lot of these were nitche acquisitions and or helping them get in the online market because they had a website. But it you know, even recently,

it's not super current. Yeah it was. It definitely wasn't following the best practices that you would see another online retailers. And one of those companies that you just listed, aerial Um, I don't think was like a strategic acquisition, wasn't. No, it was another quote unquote bailout. Yes, yeah, Warren Eisenberg this time. So Feinstein had already had his turn at bailing out a kid with the acquisition that we had mentioned previously, and chef Central was another one. Now this

the other founder, Warren Eisenberg's kid. And this is where I why I said it pays to be the kid of those two founders, because if you if you have a business concern and things go belly up. You know, maybe Daddy'll run around and help help put things right again by spending millions of dollars. It most more like millions of dollars, but I mean, come on, still, it's still a lot. It's more money than I have. But if I fall into major debt, I can't expect my

parents to rush it and then bail me out. I mean, my parents love me, but I'm not going to put them in that position. Now. The problem is Chef Central is that it had a lot of competing items with bed Bath and Beyond. Bed Bath and Beyond already had a kitchen section. Yeah, it's pretty extensive. So this was one of those cases where it wasn't complementing the the overall business. It was actually in competition with it, yes, and so eventually those would really struggle in clothes um.

This is also when they're starting to feel the crunch of not having a good online presence um mixed with this non methodical acquisition game. I wonder if they were like starting to anticipate a downturn and right that maybe the core the strategies that had led to kind of explosive growth are the sort of things that are not sustainable in the long run and can ultimately lead to becoming bloated and then collapse. Ye put words in your

mouth or anything. No, that was much more eloquent than Jonathan. So they're way behind on companies like Amazon and Wayfare, which are frequently mentioned as two of the big competitors to Bed Bath and Beyond. Far far behind them, especially particularly in the online world. That's really what we're talking Although Wayfair is looking to open brick and mortars, so um, yeah. They so they started get limiting their coupons because people

were going nuts. So with the coupon, yes, and they thought, hey, that's what we'll save us. Well, we'll cut out all that expense. But the problem was they didn't really have a good plan to keep bringing people in. Yeah, and the coupons were effective in bringing people into the stores. So now that incentive was gone, and that was actually

slowing down the traffic going into the stores. Yes, And this is where you can tell they're grasping at straws because for me, that Beth and Beyond is a place where you go in you might buy a couple of big ticket items or put them on a list, but then you're going to impulse buy a bunch of little stuff, and they started looking at a showroom model for their stores where you could go in and look at things,

but you'd have to go purchase them online. Yeah, so that was that's kind of the approach the Best Buy did right where you you go and you might check out like an audio system in the store, and then you go home and you order it online and then they come out and they set it up and everything. But they don't You don't need that necessarily with a

lot of these items. Some of them you might like if you're actually getting a bed, but yeah, but if if you're looking at kitchen utensils, it's going to kill the majority of your impulse buys. So online sales continued to go well for other companies, and then you started to see because the fact that the brick and mortar stores weren't getting as much traffic, they weren't getting as much attention, Uh, they were starting to fall into disrepair. You started to have stores that may not be as

well organized as they used to be. This is actually this really reminds me of Toys r Us because the last few times I went into Toys r Us before that one started to close everywhere. Uh, it was a nightmare walking into those stores. Well, and here's the thing, so we all know that when or you should know

if you've been listening to enough of our episodes. It is common that when your company starts to show some weakness, you get private equity firms looking to buy it, saying, I this is a profitable company, or a formally profitable company, and I bet I could turn it right. It's just that the problems that lie with this company are mostly at the top level, the management level. They've lost their way. So if we just put people in there who know

how to flip things, this could become a money maker again. Yeah. And one of those companies was Leonard Green and Partners, and they built a stake in the company, but the deal never actually went through. And the problem is you said that that Beth and Beyond reminded you of Toys r US. Well, it started reminding other equity firms of Toys r US too, and so everyone started saying, maybe we should pour money into this because it may be on the fast track to decline. That's so severe that

we can't turn it around. Yeah, and then if that Beth and Beyond said Hey, I want to just sell off you know, bye bye bye baby or the chefs. Yeah. Yeah, they couldn't do that because they didn't break out the financials. They didn't have that transparency to attract buyers for their subsidiaries. Exactly, yes,

because now they have. Since they were showing it all in bulk and not delineating which divisions were doing well, then you can't interest people into buying a subsidiary because there's no indicators there to say, well, sure, I know how well the overall company is doing, but how well is that specific part that subsidiary. And this is where

that decision came back to bite them. Whereas in the past they could have hidden weaknesses by covering them with the strengths of other part of the company, now ad meant that no one had a good handle on how any of the parts of bed Beth and beyond we're doing. Yeah, and and this is when things get really crazy up until present day. But before we get into that, I think I need to prepare myself and take a bit of a break. All right, So we're coming up on

the recent past. Now, how I hate to ask this question, how's that been going? Uh? Not great? In two thousand eighteen, by the end of the fourth quarter, they had closed twenty one stores. Yeah, I'm sure they had closed more, but in Q four they closed twenty one stores, and by two thousand nineteen their profit margin was down to less than four percent. It had been up at sixteen point five in two thousand eleven, right at their peak. Yeah, right around two thousand to two thirteen was kind of

when they were riding high the highest. So by March of twenty nineteen, their stock price had dropped eighty percent from the high point, which was from two thousand and fifteen. That's when they hit their highest point. So then you've got some companies still kind of looking at bed Beth and Beyond, but not really ready to pull the cheer because like even an activist investor kind of went, I'm not going to touch that. Yeah, I'm I'm good, I'm good.

You go on with yourself. Yeah, but thankfully not thankfully, I'm not sure it's really too early to three other actor this investors said, well, you're turned down as our game. Yeah, So we get three companies swooping in in an effort to try and transform Bed Bath and Beyond. Yes, Legion

partner's Asset Management, mckellum Advisors and and Cora Advisors. Right, and so they all think, you know, there's some solutions we could make with bed Bath and Beyond and helped turn things around, largely by giving some love to their online presence, which was still sorely behind other other online retailers and um. They also had felt that a lot of the the money that bed Bath and Beyond had either generated and revenue or received in financing had not

been properly reinvested in the actual stores themselves. Yeah. Some reports say they thought that all the money was being reinvested into the long term management. Yeah. One of the things we haven't really touched on, but it is definitely a factor is that the executives, the executive level uh

officers of bed Bath and Beyond were handsomely compensated. Yeah. Yeah, So these investors, the consortium of hedge funds, leverage their collective five percent stake to take control of bed Bath and Beyond and affect the change that they saw was needed or they thought was needed. Yeah, and specifically that meant shaking up management, right, and bed Bath and Beyond

was not happy with this. Yeah. It turns out like, when you've got a company that's still under at least the partial control of the founders, there is bound to be resistance when there when you know a group that has a minority steak, I mean that five is not controlling interests, but it's enough to start pushing for change. When when you see that happen, that resistance pops up pretty darn quick, especially when that trio makes a bunch

of demands. Yeah, which is to replace bed Bath and Beyond's entire board big as potentially Stephen Tomorrow's the CEO, and then sell off some of their underperforming brands and non core assets and develop a more comprehensive private label. I'm sure the private label thing was actually not what Up said that. No, I think it's more about firing

everybody who's in charge. Yeah. They thought that these these investors thought that be Beth and Beyond still had really good value, They had a good balance sheet still despite the decline um, and that management was what was keeping it from growth. And they thought that they could deliver five dollars per share and annual earnings over the period

of the next few years with their changes. And I guess other people did too, because when they announced that they wanted to shake up the board in the management stocks and bid Bath and Beyond. H don't get too comfortable with that, because the stock for bed Bath and Beyond would get inflated and deflate over and over again as there were various discussions about what to actually do with the company. They even had a list of sixteen nominees that they wanted considered to take over as the

new board of directors. So then what happens next? Areal well that beth Beyond had their fourth quarter call and they kind of pushed back in ways that insinuated they didn't intend to meet the investors demands and that they were already making changes that were underway that we're going to improve the company, so things like personalized data driven marketing and improving merchandise in the structure within their buying groups,

and starting various test initiatives like new layouts at Generation Lab stores, which they had been already toying with, so that was already in effect and those stores were getting more profits. So so they were like saying, forget your your activist investors, I'm going to make my own restructuring plans. Yeah, yeah, we're gonna look at our free shipping requirements and update

that and things like that. And they had said that with these changes that they were already implementing, their turnaround should be done by anyone. So they were also creating a fairly aggressive plan to get back to to a stable position. But then we get to and this is all the way up to present day as we record this episode. We're recording, by the way, in early September nineteen,

so by the middle of the spring. Uh, then we get a new change in in the story, right, because the Founders that the board of directors essentially in the CEO, are else saying, hey, no, we have our own plan. There is no need for this. You investors don't have to push for this. And then in mid spring of twenty nineteen, the founders announced they're going to retire from the board and that they would allow five new independent

directors to join the board in May. Yes, but then the fourth quarter reports came out from the previous year, and uh, stocks they weren't good, and docks dropped lower than when the board shake Shacob was announced. So people are starting to get hesitant about these changes, and so the trio said, yeah, we definitely need to get rid

of Tameris Um who had been CEO since two thousand three. Yeah, and then they also planned to close forty under performing stores and revamp and declutter the stores, which by this time needed to happen. So then now that they have the new independent board members, they have enough support on the board to put pressure on to Maris to lead to him actually stepping down. So you could say he retired or he resigned, or you could say that he

was fired. It's one of those things where the pressure was clear that he was no longer going to be able to stay in there. He was strongly encouraged, which is essentially firing. We all know what it really means. So then we get to June of two thousand nineteen, and that's when the company says, okay, investors, will do what you want on us to do. Yep. They finished changing over management and started looking at selling some of the subsidiaries like Bye Bye Baby and the Christmas Tree

shops and cost Plus. But if they sell Christmas Tree shops, where am I going to buy all my sporting gear? So yeah, they also started looking for a new CEO. Spoiler alert. As of the recording of this podcast. They do not have a new permanent CEO. They do have an interim CEO, Yes, Mary Winston, who was a president of a consulting firm. She is currently serving as CEO. Yes. And you know, so these changes are what they promised, and bed Bath and Beyond is still struggling to gain

that market back. So they're lowering prices to compete with Amazon, and they're still investing in their stores. But analysts, at least as of June, we're pretty wary about the turnaround. Still. Yeah, and so most recent news, We've got a couple of points here. One is that bed Bath and Beyond has retained Goldman Sacks, at least it's reported. Yes, the scuttle butt, if you will, is that they've retained Goldman Sacks in an effort to look at potential buyers for the for

the company. So outwardly, this is not what's being messaged to the public. The message to the public is that they're still working very hard on on various plans to kind of turn the company around. But the rumor is that they're also at the same time looking for a possible buyer to take over the company entirely. Uh and Just before we went into the studio to record this, I was looking at news reports because sometimes, you know, you see something that broke between when we researched and

wrote up an episode and when we actually recorded. And Yeah, the letter to shareholders that went out in the first week of September two nine outlined a bunch of near term plans to complete what they call a rapid refresh of their nearly one sixties stores for the two thousand nineteen holiday season, so that there's incentive for people to go there for their holiday shopping. That's that's obviously just a near term fixed I swear I do a lot

of my holiday shopping. Yeah, you never know when someone's gonna need another toilet brush. So then so then they are also looking at reducing the purchasing costs for goods. You know, we talked about how that was one of the things that really boosted bed, Bath and Beyond in the two thousands was that they had a very aggressive

buyer program. They're looking at ways of kind of updating that for the current era, and obviously they're looking at reducing other things, like they have a have a billion dollars in inventory. They're looking to reduce by by the end of twenty I think they were looking at getting rid of some lower profit items, like some lower margin items to help achieve that. And part of that also means making up enough space so that they can refresh their in how lines as well. So that's what's going

on now. We still don't know exactly what's going to happen next. We don't know if the if this if this attempt will be successful, or if it will be unsuccessful in bed Bath and Beyond is still on the path out, or if we'll have a third party come in and take over the company. Yeah, yeah, I kind of hope they don't sell off cost plus because my favorite bed Bath and Beyond has a cost plus in it, and so now I can go to two of uh two stores I enjoyed greatly. At the same time, I

don't understand this whole going to stores thing. Listen, Jonathan, So what do we learn from this? I think in bed Bath and Beyond case, if you are going to be long term management, you really need to keep track of trans and pivot when the market is showing that you need to pivot. Yeah. I also think you can't use your company as a bailout system for your kids. Yes, definitely that that's most probably that. I mean, let's just say there are other examples we could easily point to

that are looming large in current events. But you get what I'm saying. I don't have to come up and say no, no, but yeah, no, it's it's then that seems like it's a bit more than a bit excessive, and uh, you know, the there were a lot of good ideas, but one of the one of the ideas I think that was harmful to the company was that strategy of explosive growth. They didn't have a way to transition out of that into more sustainable growth. Explosive growth can work for a company for a time, but it

is not sustainable in the long run. You will eventually hit a market penetration that is at capacity and you cannot expand beyond that without cannibalizing your own business. And the thing is like as it was going through and researching, and I don't know if you run across the same thing. A lot of the more current reports are not saying that bad Bath and Beyond is no longer a good concept, that it all needs to go the way of the Internet, because like, I know, when I want to buy sheets,

I would rather go and touch them. Yeah, and then if I'm buying sheets, I want to go ahead and

buy a new spatula or whatever. So there's a lot of stuff that if you, if you're really in the market to buy them, it is better for you to be able to go and see the stuff in person, because we all know that just your monitor settings on your computer could mean that something that looked like, oh gosh, on the screen, it looked like it's avocado, but that's clearly not avocado, and I really needed to match my

avocado blender and my avocado mixer. And if it's mild moss green, that will never do exactly Like now, everything clashes and the swamp thing could be wandering around my kitchen and I would never know. No, it's it's the uh, you know that sort of stuff. We're making light of it, but no, that really does have value, right being able to go to a physical location and see these things and in some cases try them out to make sure that it fits whatever it is you're trying to, you know,

to purchase. There's a real value to that because I mean, I know that i've certainly had experiences where I've bought things online just for the convenience, received it and thought it would have been better to have actually gone to a brick and mortar store, because this is not what

I was hoping it would be. Well, hopefully when we get around to doing our follow up episode of all the companies we've previously reported on and where they are now, we'll still have bricking mortars of bed Bath and Beyond to go to. Yep, here's hoping. So let's say that someone isn't related to you, Ciel and they want to let you know what what sort of company we should cover in a future episode. How would they reach out

to us? Well, they should email us at Feedback at the Brink Podcast dot show, and you can go to our website that's the Brink Podcast dot Show. You will find an archive of all of our past episodes, so if you missed any, you can check on those. Learn all about Disney. We'll be going back to Disney before too long. I'll literally be going to Disney and two days quit bragging. But there's gonna be a lot more for us to talk about with Disney and future episodes.

But if you have other ones, send those our way. Check out our past episodes. You'll learn more about your beloved hosts and until next time. I have been Jonathan Strangler and I've been aerial casting. Business on the Brink is a production of I Heart Radio and How Stuff Works. For more podcasts for my heart Radio, visit the I heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows.