Warren Eisenberg and Len Feinstein, the founders of Bed Bath & Beyond who successfully built the company into one of the best retailers in America, didn’t talk to the press very much and when they did, they tended not to say very much…on the record at least.
So their interview this past weekend with the Wall Street Journal was nothing if not extraordinary by its very nature, a lengthy conversation as their cherished company teeters on bankruptcy and all their work over some 40 years comes crashing down. But the truly remarkable thing about the story – The Bed Bath & Beyond Founders Let Go (https://www.wsj.com/articles/bed-bath-beyond-bankruptcy-stock-founders-11674778627 and behind a paywall) – is the candid self-critiques from Eisenberg and Feinstein about what they wished they had done better.
Their comments were couched in their admission that they have moved on from any emotional attachment to their creation. “When we left, we shut the door and that was it,” said Feinstein, now 85, who along with his partner stepped down as executives in 2003 and were then forced off the board in 2019 when outside investors pushed for widespread management changes.
“Whatever happens, happens,” he said, “and it was up to the next group to do the best they could. Plenty of chains have gone out of business.”
That attitude contrasts with their hands-on management style of the company during its heyday, right down to policies about its buyers not accepting free coffee from vendors, a barebones office environment and hard-nosed bargaining with suppliers to get the best prices, often accompanied by relentless chargebacks and back-end maneuvers that helped make BBB a financial juggernaut.
But in the Journal article they pointed to two key areas where in hindsight they wished they had done better and according to the writer, “say they bear some responsibility for the company’s struggles.”
The first was their slowness in moving into e-commerce. “We missed the boat on the internet,” said Eisenberg. “If we made an error by not moving fast enough into the internet, it wasn’t because we wouldn’t spend the money. It was that we goofed.”
Eisenberg, now 92, said he didn’t imagine that shoppers would abandon the social activity of going to stores by ordering online. “We didn’t realize fast enough how the internet would have such a major effect on retail.”
Bed Bath was slow to move into e-commerce under their leadership and the subsequent CEO Steven Temares, who they promoted and supported for the 16 years after they left active management. Today its online business remains behind the retail curve and is often cited as a key reason for its struggles in today’s marketplace.
The other mistake they acknowledge? They didn’t entirely let go, even leading the retailer’s annual meetings long after they were no longer co-CEOs, a role usually reserved for the current top executive. “I don’t know if you should be running a big business when you’re in your 80s,” Feinstein told the Journal.
While admitting these errors, the pair stood behind the strategy that made BBB so successful, from its legendary coupons to stack-‘em-high shelves full of nationally branded goods to giving local store managers an unprecedented level of authority to set the merchandise mixes for their individual stores.
Virtually all of those practices were shoved aside under the new management that came in following the board upheaval and Mark Tritton coming on as CEO in 2019. And both the new strategy and its poor execution led to Bed Bath’s dismal situation today where its stock trades at barely $2.50 a share and its overall value is less than $300 million. At its peak in 2013 it was worth more than $9 billion.
The tone of the Journal article seems to suggest Eisenberg and Feinstein – the trade always called them just Warren and Lenny – have few regrets…or at least any they want to share. “It’s not the same store,” Feinstein is quoted saying at the conclusion of the article and that in itself says everything you need to know about Bed Bath & Beyond past, present and future.