The traditional home goods retailer Bed Bath & Beyond and baby goods store Buy Buy Baby announced on Sunday (23) that it was filing for bankruptcy protection, the result of a long period of declining sales and the company’s inability to keep up with the rise of online shopping.
The 52-year-old retailer said it would begin the process of closing 360 Bed Bath & Beyond stores and 120 Buy Buy Baby stores on Wednesday and would seek to sell parts of its business. The company stated that it expects all stores to be closed by June 30.
The traditional store coupons will no longer be accepted starting Wednesday. Customers will have until May 8 to use any gift cards they possess. The company did not specify when the store apps would be shut down, only stating that customers can continue using them “at this time.”
The last few years have been tumultuous for retailers in the United States. In 2020, J.C. Penney, Neiman Marcus, and J. Crew filed for bankruptcy. However, in the last two to three years, retailers benefited from consumers’ willingness to spend the money they received from government stimulus. Now, with extremely high inflation, shoppers are being more selective, and retailers that managed to hold on during the pandemic are taking risks again.
A success story
The retail landscape was very different when Bed Bath & Beyond was founded in 1971, as a way to compete with the home goods sections of department stores. The company’s founders, Warren Eisenberg and Leonard Feinstein, opened the first stores of the chain in New York and New Jersey. The venture was originally called Bed ‘n Bath, a nod to its narrow line of merchandise.
Compared to a store like Macy’s, the new retailer promised a larger selection of sheets, towels, shower curtains, and other household necessities. As the variety of items offered grew, the store was renamed Bed Bath & Beyond in 1987 and went public in 1992.
Instead of TV ads, Bed Bath & Beyond relied on word-of-mouth advertising and the large coupons it delivered to the mailboxes of millions of Americans. Countless shoppers kept those 20% discount cards in their cars or bags.
By 2000, Bed Bath & Beyond had 311 stores. A decade later, it had 1,100. From 2002 to 2012, the company acquired Harmon Stores, Christmas Tree Shops, Buy Buy Baby, and Cost Plus World Market. The brands helped diversify the company from a retail perspective, but the changes also diverted management’s focus from other crucial investments, such as the e-commerce business.
As competitors like Amazon, Target, and Walmart invested to improve the online shopping experience, Bed Bath & Beyond saw its market share decline.
Which companies are growing?
Bed Bath & Beyond fell into the “retail apocalypse” of the last decade, but many chains are still growing.
Growth has been more pronounced in the discount retail segment, as budget-conscious shoppers seek low prices, especially during times of high inflation.
So far, announcements of new store openings have outpaced store closures at companies like Dollar General, Family Dollar, Dollar Tree, and Five Below.
Source: The New York Times and CNN