Bed Bath & Beyond’s Run Is Over

By Douglas A. McIntyre Published Sep 1, 8:30AM EDT

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Bed Bath & Beyond’s Run Is Over — © LeoPatrizi / Getty Images

Bed Bath & Beyond Inc. (NASDAQ: BBBY) received new financing, cut 20% of its workforce and closed 150 stores. It won’t help. People do not want what the domestics retailer has to sell.
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Based on a pro forma analysis, Bed Bath & Beyond’s available capital went from $500 million to $1 billion. For those who put in the money, never give a sucker an even break. Somehow, smart money believes that cutting costs will solve the retailer’s problems. The company did as most dying retailers do. It plans to cut its way to profitability. The solution is to kick out workers and chop stores that do not perform well. Based on its financial reports, one has to wonder about the performance of what is left.
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Bed Bath & Beyond does not even have a real chief executive officer. It has not found one. Sue Gove, the interim CEO, made the restructuring decisions after a very short time on the job.

Two other plans involve making a stronger bond with customers and reducing the number of items Bed Bath sells. Usually, a decline in available items also cuts store traffic. Maybe Bed Bath & Beyond is the exception.
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Additionally, the company said it would improve relationships with vendors. All vendors want is to be paid.
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Finally, Bed Bath & Beyond handed out a Q2 interim update that showed a drop of comparable store sales of 26%, a figure almost no retailer in history has overcome.

Bed Bath & Beyond now faces the holiday season, which is a make-or-break period for most retailer profits. Unless it has a surge in sales, which is highly unlikely, it cannot stay open next year.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.