BUST: The Very Public Demise of Bed Bath & Beyond
Who will remember the brand Bed Bath & Beyond in a few years, and what will they say? Only time will tell, but in the interim, the retail media has had no fodder shortage over the past few weeks, dissecting how and why this iconic multi-location brand declined and ultimately declared bankruptcy.
Monday morning quarterbacks abound, even when football isn’t in season.
Because this is the first installment in Street Fight’s new series — Boom & Bust — the pressure is on to say something meaningful that hasn’t already been said.
The brand was founded in 1971 and enjoyed $2B in sales and more than 300 stores in 2001.
But, like many categories, the home goods space faced a wide range of competitors — both online and brick-and-mortar.
I reached out to retail pundit Chris Walton for his take on the top three reasons for failure. He believes it was due to the following:
- The company’s blind faith in its CEO
- The reliance on “owned brands” as a strategy
- Forgetting why its customers originally loved the brand (deep inventory and brand cache.)
- Be creative and deliberate about branding. Understand why people enjoy shopping at your store (at a physical location or online), eating at your restaurant chain, or dropping by your c-store, and creating memorable experiences for them. Anyone can sell dishes. How you sell them can make a huge difference.
- Promo discounts are important but will never be enough. We clearly loved those coupons. But today’s consumers have the ability to easily shop for the lowest price on an item they need.
- Company leadership and culture are as critical as ever. AI, local search techniques, and digital marketing strategies are all imperative. But the humans behind brands are still making big financial and strategic decisions, and instability or wrong choices by management can lead to disaster.
- Debt can kill. That sounds simplistic, but it’s timeless and true.
We’ve seen retailers and multi-location brands attempt a comeback after bankruptcy. Toys “R” Us is rising again within Macy’s stores (which face their own challenges). Sbarro declared bankruptcy twice but appears to be thriving and growing.
All we can do at this point is learn from the tactical errors of the brands that stumbled and fell and save a few dollars this week with those coupons that may be sitting in our drawers at home.
Next week…a BOOM — a company that has survived 30+ years and is still going strong!
