BBB: Strategic sourcing, store remodel initiative on the agenda – Home Textiles Today

Union, N.J. Bed Bath & Beyond has put together a three-year plan as part of its transformation strategy. Full details will be announced at the companys Investor Day event on Oct. 28, but during this mornings second quarter analyst call, executives previewed some of the changes.

Sourcing: A newly formed procurement organization will crated a centralized spending control and vendor management process to deliver substantial savings. BBB had previously announced that it plans to develop more house brands, cull duplicative skus and pare its supplier roster.

Product priorities: The retailer plans to expand and double down on private label brands in bedding, bath, kitchen and storage/organization, said Tritton.

Physical stores: The plan includes what president and CEO Mark Tritton intimated will be a broad store remodeling program launching next year. In the meantime, one-third of the 200 stores slated to close permanently will go dark by the end of this year. The company expects to transition 15% to 20% of the sales generated by those locations to digital or other nearby company stores.

New customers: BBB gained roughly 2 million new online customers during the second quarter 40% of them new to the brand. The latter are six years younger than established customers and less likely to use coupons, which have long been a drag on the retailers bottom line. Coupons arent going away, but in the future coupon offers will be more curated, Tritton said.

In another plus, new customers are buying from higher margin categories, specifically bedding, bath, kitchen, food prep, cleaning and home maintenance, he added.

The second quarter ended Aug. 29 generated healthy results for Bed Bath & Beyond, including its first positive quarterly comp since Q4 2016 and strongest adjusted earnings per share in more than two years. We bel this was a pivotal quarter for our organization, said Tritton.

Q2 net sales slipped 1% to $2.7, driven in part by the sale of the One Kings Lane division. Digital sales jumped 88%, while net sales from stores fell 18%. Total comp rose 6%.

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BBB: Strategic sourcing, store remodel initiative on the agenda - Home Textiles Today