Bed Bath & Begone: It’s Over…But It Didn’t Have to Be

In the end, it is the end.

Bed Bath & Beyond filed for bankruptcy early Sunday morning and if the news was not exactly a shocker, it was still somewhat startling to see. Once the nation’s largest home furnishings specialty chain – the very epitome of the category killer retailer and a cultural and social icon nearly unparalleled in its standing with shoppers – BBB said it is going out of business.

The funeral arrangements were still being worked out but it appears what’s left of the chain—360 namesake stores and 120 BuyBuy Baby locations – will run going-out-of-business sales for some period of time and then will likely go dark. The company will look for a buyer of its remaining assets – those stores, the brands and whatever inventory is left – but even if someone comes in to pick up the pieces the Bed Bath & Beyond the American shopper has known for more than five decades will be gone.

And the sad part is it didn’t have to end this way.

Some will say Bed Bath got caught up in the current retail malaise, another victim of the times like David’s Bridal, Party City and Tuesday Morning. Some will blame the failed turnaround under former CEO Mark Tritton that emphasized private label products and a store remodeling program that drastically moved away from the store’s signature stack’em-and-rack’em merchandising strategy. And still others will say consumers are done for the time being shopping for their homes and with the overall furnishings category in serious slowdown BBB just got caught in the maelstrom.

All of them won’t be wrong but they will miss the bigger picture. Of most importance right now is that as over the past few months as the company’s management embarked on an unprecedented and, in hindsight, ill-advised strategy to avoid the inevitable it wasted valuable time that might have allowed it to try to work out its problems under the protection of bankruptcy laws. Of course, there’s no guarantee it would have turned out any differently but many companies – including many retailers – have restructured under chapter 11 and come out of it with a fighting chance for survival. Was it bad advice, was it management, a go-along board of directors and investor stakeholders trying to protect their positions, was it ego? We’ll never know for sure but it seems that all of those could have been factors.

What if Bed Bath & Beyond had filed for bankruptcy ten months ago in June of 2022 when it ousted Tritton and his strategy or even filed last fall when it had become clear to just about everyone but the company that it would be impossible to save itself? Even a filing in January of this year when it started its financial finagling that only rearranged the red numbers on the spreadsheet?

At any of those points, BBB could have restructured, it could have sold off its most valuable asset, the Baby operation, it could have closed stores and reduced headcount under bankruptcy guidelines and gotten real financing to order new goods and give both suppliers and shoppers the reassurances they needed to continue to buy into the BBB brand.

Again, it might not have worked. The retail graveyard is full of nameplates that went this way and still failed…most notably BBB’s one-time key competitor Linens’n Things. But it’s an educated guess to say that plan had a better chance of succeeding than the doomed doings of the past few months.

There are many other contributors to this morning’s sad news. Yes, Tritton was part of the problem: he had the right idea in bringing in exclusive merchandise but the company he inherited was woefully unprepared for direct sourcing and the product development needed to fill the shelved with its own private label goods.

But the blame goes back further – much further. The management of the company before Tritton – the ones thrown out by an outside investor insurgency – never spent properly in the physical stores nor in e-commerce. Both were significantly sub-par while those executives led by CEO Steven Temares focused on meaningless acquisitions it never built on as it was paying themselves and investors too much of the substantial profits it was earning.

Going back even further, the company’s late start and lack of commitment to e-commerce – admitted to by founders Warren Eisenberg and Len Feinstein in a recent Wall Street Journal interview, one of the rare ones they’ve ever done – put it significantly behind the curve and allowed competitors like first Amazon and later Wayfair to take important market share.

All of this in hindsight is easy to chronicle but these were professional retail executives who were there in real time and should have seen what was happening. They should have known better.

Now, tens of thousands of employees will be out of work, many of whom may have spent decades with the company believing these were lifetime jobs. Thousands of suppliers will become creditors unlikely to get much of their money back and even more so, strapped to find other retailers to replace this sales volume. And hundreds of millions of shoppers will lose one of their most favorite places to shop. It didn’t have to turn out this way. But it did.

Bye-bye Bed Bath & Beyond. Rest in pieces.