Bed Bath & Beyond plans to close about 200 stores during the next two years as it looks to return to profitability.
The embattled home furnishings retailer, which operated a total of 1,478 stores as of May 30, announced the decision to “right-size” its real estate portfolio in reporting its first-quarter results. Bed Bath & Beyond said the closings, which will mostly affect its 955 namesake locations, and other cost restructurings should generate annual cost savings of between $250 million and $350 million, excluding related one-time costs. (Bed Bath & Beyond’s other store banners include buybuy Baby, Christmas Tree Shops and Harmon Face Values.)
The company reported that its net loss narrowed to $302.29 million, or $2.44 per share, for the quarter ended May 30, from $371.09 million, or $2.91 a share, in the year-ago period. Excluding one-time items, it lost $1.96 per share.
Sales tumbled 49% to $1.31 billion from $2.57 billion a year ago, as the retailer’s stores were temporarily shuttered for much of the quarter amid the COVID-19 pandemic. Digital sales surged 82% during the period, rising more than 100% during April and May, the company said. Digital sales represented about two-thirds of the chain’s first-quarter sales.
"The impact of the COVID-19 situation was felt across our business during our fiscal first quarter, including loss of sales due to temporary store closures and margin pressure from the substantial channel shift to digital,” stated president and CEO Mark Tritton. “Our actions to strengthen our financial position and liquidity are enhancing our flexibility and capacity to invest and rebuild our business for long-term success.”
With nearly all of Bed Bath & Beyond’s stores now open, Tritton said he is encouraged by early customer response, including continued strong demand — in excess of 80% — across the chain’s digital channels during the month of June. The retailer’s online business has been bolstered by the expansion of its buy-online-pick-up-in-store and curbside pickup services during the pandemic.
“We believe Bed Bath & Beyond will emerge from this crisis even stronger, given the strength of our brand, our people and our balance sheet," he added.
Bed Bath & Beyond noted it has increased its liquidity and financial flexibility. It ended the quarter with cash and investments of approximately $1.2 billion, with an $850 million asset-based credit facility that it secured in early June.