Overstock Steps Into Bed Bath & Beyond
American retailer Bed Bath & Beyond had a spectacular fall from grace. Though the hundreds of shops are shuttered, the name lives on, having been picked up by online home furnishings retailer Overstock, which has now adopted the BB&B name as its own.
In 2019, before Covid, the Bed Bath & Beyond group had annual sales of $12bn and operated c.1,530 outlets all over America and Canada. It was quite the growth story for a retailer that started in 1971 with a single shop called Bed ’n Bath in Springfield, New Jersey.
With not much of an online presence, BB&B was hit hard by the pandemic, and downsizing commenced in the middle of 2020. The company had loaded up with debt to finance share buybacks, and as trading declined the store shutdowns accelerated until the chain entered bankruptcy in April 2023. A low point of the tailspin was the September 2022 suicide of finance director Gustavo Arnal, who jumped from the balcony of his New York apartment.
In mid-June 2023, Overstock paid $26m for the Bed Bath & Beyond trade names and customers lists. The Utah-based retailer has been trading since 1999, the dawn of the internet era. Unlike BB&B, Overstock has no shops. It’s just a number of
websites and mobile app that display furniture, décor, rugs, bedding and bath, home improvement, outdoor, and kitchen and dining items. The goods for sale are sourced from c.2,600 third-party manufacturers, distributors and other suppliers, and the choice on offer is immense.
Unlike the case at the old BB&B, Covid was good for Overstock. Turnover surged to $2.5bn in 2020 from $1.4bn the year before, and the uplift continued into 2021, when sales topped $2.7bn. It was back to earth in 2022, when revenue retreated to $1.9bn and operating profit reduced to $27m from $111m in 2021.
Overstock’s main operating expenses are sales and marketing (52% of total) and technology (29%) The tech spend, which amounted to $121m in 2022, is important because the website and app experience for shoppers has to be seamless, along with the supply chain and logistics control.
Luckily for Sligo, a decade ago Overstock decided to establish a tech engineering hub 7,200km east of Salt Lake City. CEO Jonathan Johnson and CTO Joel Weight visited the Sligo office recently to celebrate the tenth anniversary, mingle with the 82 staff, and maybe discuss some bonuses.
Overstock’s Canada website was changed to Bed Bath & Beyond in just two weeks over the summer, while the similar branding transformation for the US site took seven weeks.