Can Bed Bath & Beyond get a return?

Bed Bath & Beyond is returning with smaller format stores, but some industry experts told Fox Business that the size of their stores doesn’t matter as much as the product itself.

That’s where his previous management team lost the brand, according to CSG’s consulting man, Kimberly Reuter and Hitha Herzog, retail analyst and research director of H Squared Research.

Last week. Kirkland’s Inc. finished an investment agreement of $ 25 million with Beyond, the Bed Bath & Beyond, Overstock, Zully and Buybuy Baby, in which Kirkland became the exclusive operator and licensee of brick and mortar for “neighborhood “Small and smaller format. Bed Bath & Beyond places throughout the country.

In October, when the agreement was announced for the first time, the companies said they would take advantage of the operations experience of the Kirkland store and its brick and mortar footprint and to cure a “variety of partners of Iconic inherited suppliers.” The executive director of Kirkland’s Inc., Amy Sullivan, said in a statement at that time that “Kirkland’s house has a 58 -year legacy in the home decoration sector, and the central force of our brand and this organization lies in marketing and store operations. “

A Bed Bath & Beyond Store is seen on June 29, 2022 in Miami. (Photo by Joe Raedle / Getty Images / Getty Images)

Reuter said that the former Bed Bath & Beyond had been plagued with problems such as “poor inventory management, slow adoption of online purchase trends and excessive hair removal in the purchase of coupons” that they made to request the bankruptcy protection of Chapter 11 in 2023.

Bed Bath & Beyond Brand returns to physical stores

In June of that year, Overstock acquired the company’s intellectual property assets for $ 21.5 million, and in October, its corporate name changed to Beyond Inc., although he continued to fight for survival in the midst of evolving retail dynamics. Last year, he moved away from an agreement with the group of container stores that would have allowed him to use a section within the real estate locations of the store to show his variety of kitchen, bathroom and bedroom items, which would be shared brand.

“Opening in a smaller format will not solve any of those problems,” said Reuter. To exacerbate the problem, the company served customers at a time when broad access to domestic goods was limited. Today, there is a relentless competition in the household items between Amazon, Temu, Target and Wayfair, Reuter said.

Herzog agreed, saying that while “Bed, Bath and Beyond has an incredible brand equity”, that is “where its value exists mainly.”

“The challenges of the store were not about the recognition of the brand, the challenges had to do with the stores that did not focus on what the consumer wanted at the local level,” said Herzog. He added that other big stores such as Walmart and Target do a better job to attract a consumer based in that local market.

Reuter predicted that the best scenario for these stores is to become a physical exit for Kirkland’s private label products, as well as exaggerated products and Zulily.

Bath & Beyond closed stores: these companies are moving

“This play begins to seem very similar to TJMAXX home stores. We also have the potential that these physical locations become return centers for sister companies,” Reuter said.

Anyway, Reuter said that if Bed Bath & Beyond and Kirkland do not address the root cause of the failure, the company’s supply chain and inventory, “they will fail again.”

Fox Business contacted Kirkland to comment.

People go through a bathroom and beyond the store on October 1, 2021 in the Tribeca neighborhood in New York City. (Michael M. Santiago / Getty images / getty images)

“In layers on this, the pending increase of tariffs, which in turn will increase the cost of the product, could be the perfect storm for another failure,” Reuter added.

On the other hand, Herzog said that Kirkland’s support is significant means that the company is better positioned to overcome its previous challenges.

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Before, management was making decisions that were not exactly in line with what its main client would like, Herzog said. Today, Kirkland is “promoting conversation and creating the road map where this company will go,” said Herzog. “With Kirkland they support them, that makes a difference this time.”

“Without throwing the management again to a management point under the bus, they had problems. I don’t think they really understood the pivot. I think they stumbled after the pandemic,” said Herzog. “They did not understand how to make their business agile enough to resist great success for the retail industry and its business such as pandemic.”