A person enters a Bed Bath & Beyond store on October 1, 2021 in the Tribeca neighborhood of New York City.
Michael M. Santiago | fake images
Bed bath and beyond is eliminating one of its private labels, Wild Sage, about a year after the company made an aggressive push toward exclusive brands, at the time touted as a linchpin of its turnaround strategy.
A spokeswoman for the home goods retailer confirmed that the brand is being discontinued.
The move is likely just the start of bigger changes for Bed Bath and its marketing approach as it tries to reverse declining sales. appease activist investors and win back buyers. The retailer has run into inventory and supply chain problems, initially losing hundreds of millions of dollars in sales due to out-of-stock items and, more recently, a glut of unwanted products left on warehouses and store shelves.
Bed Bath is also looking for a new leader, after the meeting announced at the end of June that CEO Mark Tritton and Chief Merchandising Officer Joe Hartsig had left the company. Your Accounting Manager also departed in June.
In a company statement, Bed Bath & Beyond said that private labels, which it calls “house brands,” “have a place in our assortment.”
“Customer response has been positive and we are very pleased with the strength of several private label brands, such as Simply Essential, which offers opening prices,” the company said. “At the same time, we recognize that our customers want a better balance between national and private brands, and we are making the necessary changes to the range to improve the customer experience and drive sales and traffic.”
Bed Bath said it will provide more updates on its strategy this month. His spokeswoman would not say whether the company is considering phasing out other private labels.
Private labels became a centerpiece of Tritton’s vision and a dominant part of Bed Bath stores. Triton, a Goal veteran, joined Bed Bath in 2019 and released a playbook similar to that used by the cheap chic retailer. He oversaw the cleaning of stores and the debut of lines of bedding, kitchenware and more that couldn’t be found anywhere else.
Bed Bath launched nine private labels as of spring 2021. One was Wild Sage, a brand that the company described as “elegant, eclectic, free-spirited bedding, decor, furniture, bath products and linens created for young adults (and the young at heart).” The first collection launched in June 2021, just in time for the back-to-college season.
However, some buyers found the new brands disorienting and less appealing. Instead of seeing big displays of big national brands, they saw displays of bedding, furniture, and dinnerware with a name they didn’t recognize.
Same store sales plummeted 27% for the Bed Bath & Beyond banner in the most recent quarter, which ended May 28.
After the company’s most recent earnings report in late June, board member and interim CEO Sue Gove said the company’s sales results “didn’t live up to our expectations.”
Jason Haas, a retail analyst at Bank of America Securities, said the retailer alienated clients by moving too quickly. He also phased out his popular 20% off coupons, a move he has since reversed.
“If they released those brands at a more measured pace and layered them [with national brands] and the customer became a little more familiar with seeing them on the shelf, they would have been more successful,” he said.
Plus, he said, Bed Bath ended up aggravating COVID-19 pandemic-Issues related to the supply chain. Nearly all retailers faced congested ports and truck shortages, but private-label merchandise tends to have longer lead times since it’s produced and shipped from overseas. National brands tend to have merchandise that can get to stores more quickly from US warehouses, Haas said.
On the Bed Bath website, there are signs of the end of Wild Sage. Their merchandise is available at deep discounts, including a tie-dyed robe for $7, down from its original price of $35, and a 16-piece terracotta dinnerware set for $16, down from the original $80. Many other Wild Sage items are out of stock after being listed for up to 90% off.
However, as Bed Bath pivots toward more national brands, you may run into a different kind of problem. Suppliers may be reluctant to work with the retailer or request advance payments as the company’s coffers are quickly depleted.
Bed Bath reported approximately $108 million in cash and equivalents in its fiscal first quarter, down from $1.1 billion a year earlier. Its net loss increased to $358 million from a loss of $51 million in the same period in 2021.
For now, the company can still draw on its existing $1 billion asset-based revolving credit facility from JPMorgan Chase, according to a quarterly filing with the Securities and Exchange Commission.
As of May 28, Bed Bath said it had $200 million in outstanding loans under the loan.
Still, analysts believe the home goods retailer will need more cash to weather its recovery.
Bed Bath’s chief financial officer, Gustavo Arnal, said in a June conference call that the company still had “sufficient liquidity” with its line of credit and had enlisted Berkeley Research Group consultants and financial advisors to seek additional capital.
“There are avenues that we are exploring to further increase our liquidity and navigate through the working capital cycle, particularly in the next two quarters, given the seasonality of our business,” he said on the call.