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Bed Bath & Beyond closes 150 stores, cuts staff and turns around

NEW YORK (Nextor) — Bedbath & Beyond announced Wednesday that it will be closing stores and laying off employees in a bid to turn around its struggling business.

Director and interim CEO Sue Grove described the move as a “back to basics” philosophy that will allow the company to focus on better serving its customers and driving growth. said it would be

The Union, New Jersey-based home goods retailer has announced it will close about 150 eponymous stores and cut its workforce by 20%. These reductions are estimated to save the company $250 million in the current fiscal year. He also said the company is considering selling more shares to bolster its finances and plans to raise more than $500 million in new funding. When asked which stores will be closed, a Bed Bath & Beyond spokesperson told Nexstar that it would share information “when it becomes available.”

But it will keep Bye Bye Baby Chain, which it considered selling earlier this year.

“We have thoroughly reviewed our business and today are announcing immediate action aimed at increasing customer engagement, driving traffic and regaining market share,” Grove said. includes changes to our merchandising and inventory strategy rooted in national brands, with a focus on driving digital and foot traffic and optimizing our store fleet. , we believe it will have a broader positive impact on customer experience, inventory assortment, supply chain execution and overall cost structure.”

Bed Bath & Beyond shares fell more than 21% on Wednesday, down 65% over the past 12 months.

In late June, a report from Bank of America analysts said the company turned off air conditioning in its stores to save money, among other trends. A representative told Nexstar, “No Bed Bath & Beyond stores have been instructed to adjust the air conditioning and there have been no changes to corporate policy regarding utility use.”

The company, which has been plagued by a prolonged slump in sales, said Wednesday it was returning to its original strategy of focusing on national brands instead of pitching its own brands. It reverses the strategy adopted by CEO Mark Tritton. The company said it would get rid of his third of the store brands it began rolling out in the last year or so.

“There is still an incredible amount of love for Bed Bath & Beyond,” Mara Sirhal, newly appointed brand president of Bed Bath & Beyond, told industry analysts on Wednesday. “We have to return to its rightful place as a destination in the home category. Our goal is to achieve this by leading the products and brands our customers want.”

As of May, the retailer operated a total of 955 stores, of which 769 were Bed Bath & Beyond, 135 were buybuy Baby stores, and 51 were sold under the Harmon, Harmon Face Values, or Face Values ​​names. I’m here. As of February, it had approximately 32,000 employees.

Time is of the essence for the company as it heads into the important holiday shopping season. The company said he expects existing sales to fall 26% in the second quarter, which ended Saturday. He ran out of $325 million in cash in the quarter.

Sirhal said the retailer wants to return to where shoppers find innovative items. Bed Bath & Beyond, for example, was the first to offer customers products such as air fryers and single-serve coffee makers, she says.

GlobalData Retail Managing Director Neil Saunders said he applauded the strategic shift. But he said the task was “easier said than done” and would require close relationships with suppliers to secure a unique product.

“If Bed Bath & Beyond simply stocked the same kind of stuff as Target, Walmart, or Amazon, they would find themselves struggling to differentiate and having to match on price would squeeze their margins. will,” he said.

Bed Bath & Beyond has been facing a lot of turmoil lately. The company’s shares surged from $5.77 to $23.08 in just over two weeks in August, a trade reminiscent of last year’s memetic stock craze.

But after billionaire Ryan Cohen, a well-funded investor, activist, and co-founder of online pet supplies retailer Chewy Inc., sold all of his shares in the company, the stock rebounded. I was. In March, Cohen bought his nearly 10% stake in Bed Bath & Beyond, and investors hoped he could turn the company around financially.

The shares fell $2.58 to close at $9.53 on Wednesday.

The company said it was still looking for a permanent CEO. Tritton’s successor on the board was Sue Gove as interim CEO. Chief Operating Officer John Hartman is leaving the company, eliminating the position.

The Associated Press contributed to this report.

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