Bed Bath Closing 200 Stores
Bed Bath & Beyond has announced its decision to close down 200 stores to focus on digital sales for its newborn care items as well as its other products. The 200 stores constitute 21% of its stores. The company plans on doing this with long term investment plans over the next two years. They will be investing more in its digital transformation as a way of optimizing the sales of its baby and other products.
The company plans not only to optimize its presence to suit local market sales demand but also plans to test new store formats as well as locations. These closures are to be the first step the retailer takes in this direction. It is a revelation of what is to come and a light to the future of the company. The retailer is not planning to close down all of its physical stores; rather this is a move to optimize sales by closing down redundant stores and leaving the productive ones. According to the CEO, John Hartmann, the retailer wants to focus on a digital-first platform.
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An Increase in Sales Includes Newborn Care Products
In its fiscal fourth quarter, the retailer had a net sales of $1.3 billion, down 49% compared to the previous year. While digital sales grew to 82%, store sales had seen a disastrous decline of 77%. Bed Bath, like many other retailers, had closed down some stores during the heat of the pandemic to help slow the spread of the Coronavirus. However, its Buy Buy stores remained open, since they were deemed essential. This was partly because the Buy Buy stores contained its newborn baby items. According to its CEO, one of the key things Bed Bath is putting its hopes on in the digital domain is the buy-online-pickup-in-store (BOPIS) and curbside pickup.
This service was offered in nearly 60% of its stores at the end of the quarter in May. This effort alone has helped digital sales to grow more than 100% during April and May. Digital sales also represent nearly two-thirds of the total quarterly net sales. This was a close call, as the store sales dropped to about 25% year over year. The impact of the Coronavirus and how it hampered the sales of baby bath basics and especially non-essential products within stores cannot be ignored.
Digital Upgrades for Newborn Care Items
Bed Bath wasted no time in seizing momentum and has refreshed its website during the quarter. The website has indicated new branding and has also incorporated customer behavior learning from a partner, Pinterest. With over 200 million visits across its digital properties, Bed Bath is recording a 35% upward growth in digital visits year over year. It has also recorded 134% mobile app downloads year over year. Bed Bath is projecting good returns on the sales of its newborn care items as well as its other products within the digital domain as well as utilizing BOPIS. If it wanted, Bed Bath & Beyond could also incorporate a baby care tips section on its website to enhance sales. The possibilities are endless.
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