Bed Bath & Beyond introduced its latest retail recovery plan, based on better merchandise and a value message for consumers. There’s plenty for investors to cozy up to, as the retailer outlines its ambitions to regain market share.
Rallying around the promise to "unlock the magic in every room," the retailer says its ability to attract 1.4 million new customers this year proves it's on the right track.
Key to the effort is intensifying its private-label efforts in the next 18 months, launching more than 10 new brands to triple its offerings. Besides more products and different price points, the retailer expects to deliver $200 to $250 million in sourcing savings, reducing the number of suppliers it uses.
"We have made tremendous progress this year to strengthen our financial position and focus our portfolio in core home, baby, beauty and wellness markets," says Mark Tritton, CEO, in the announcement of the initiative. "We will build on these strong foundations with a three-year growth strategy that further elevates the shopping experience, modernizes our operations, and unlocks sales growth."
The company embarked on its "digital-first, always omni" journey a year ago, when Tritton left Target to join as chief executive officer. Since then, it's moved to close underperforming stores, cleaned house in the C-suite and hired high-profile executives, including chief brand officer Cindy Davis, who had been at L Brands, and chief merchandising officer Joe Hartsig, who joined from Walgreens.
In presenting the plan to investors, Tritton says the Union, New Jersey-based chain is focusing on five core segments among its 37 million customer: the nester; the minimizer; the juggler; the innovator; and the creative.
Seth Basham, who follows the company for Wedbush Securities, calls the initiative "a solid financial roadmap" in a note he published after the announcement.
"The company expects to drive low-mid single-digit comp sales growth in 2023… indicating confidence in plans to transform into a company that can hold or gain market share."