Charming Charlie declaring bankruptcy and announcing it will close all its stores was a tale of the Retail Apocalypse that surprised me last week. So did the following news from CNBC that the channel uploaded less than an hour ago: Why Bed Bath And Beyond Is Facing Extinction.
Bed Bath and Beyond became a massive homegoods retailer with a decentralized structure and a focus on keeping customers happy. In popular imagination, Bed Bath and Beyond is best known for its generous coupon policy. But critics say the once ubiquitous chain ignored the threat from newer, nimbler online rivals like Amazon.Yikes! Bed Bath & Beyond wasn't even on my radar as a chain that was facing trouble from Amazon and other online retailers as well as its own internal issues. Thanks to CNBC, now I know.
The CNBC video talked a lot about the chain's losses and lower same-store sales, but didn't mention store closings. It turns out that, as USA Today reported in April, Bed Bath & Beyond plans to close at least 40 stores this year but open 15 new locations.
The New Jersey-based home goods retailer, which also operates Buy Buy Baby, Harmon Face Values and World Market, announced mixed results during its fourth-quarter call with financial analysts this week.Compared to a lot of chains in trouble, a net loss of 25 stores out of more than 1,000 hardly registers. I'm not terribly worried that the nearest location, just a little more than two miles west of me, is going to close any time soon. I also think that the chain is facing a crisis, but it's not in imminent danger of going out of business. Still, it's a sign that issues with brick-and-mortar are spreading beyond dead malls and the businesses associated with them, including chain restaurants.
"We expect to open approximately 15 new stores in fiscal 2019. This will be offset by a minimum of approximately 40 stores we expect to close," Robyn D'Elia, chief financial officer and treasurer, said during Wednesday's earnings call. "This number will grow unless we are able to negotiate more favorable lease terms with our landlords."
D'Elia said most of the "planned closures are for Bed Bath & Beyond stores."
That reminds me; remember the list of stores by category that are likely to close by 2026 in 12,000 stores are likely to close this year, including at least 313 Fred's, a tale of the Retail Apocalypse? The USA Today article reported the total could be even worse.
The brick-and-mortar downturn is expected to continue, according to a report released this week from UBS Securities. Investment bank analysts said 75,000 more stores would need to be shuttered by 2026 if e-commerce “penetration rises from 16% currently to 25%.”Wow! As I wrote last month, "Looks like I'll be busy covering the Retail Apocalypse for quite a while."
Are these outlets losing money or are they just not making enough money to satisfy investors?
ReplyDeleteBoth. The chain lost money for the first time since 1992, if not earlier.
DeleteI'm sad to hear about hard times for BB&B -- break out the crying towel, available in multiple colours in Aisle 34. Although from the numbers, it doesn't sound like it's soon for the Great Beyond.
ReplyDeleteI have a sentimental attachment to the chain. When we left Australia in 2009 and immigrated to Canada, one of the first things the wife wanted to do was drive our just-acquired Prius across the Fraser River to a mall (still in Canuckrainia) where there was a BB&B. The bulk of our household goods was still in a shipping container floating across the Pacific (via Singapore -- everything has to pass through there for some shippy reason.) Buying fresh towels, sheets and other household things is a comfortactivity for women, even when they're anti-materialistic hippitypes.
The Guardian (which is my go-to source for mainstream newspin) has a take on the Retail Apocalypse that manages to combine Manhattan and Lostralia. Speaking as a former journo, I sense that some editor took a NYCentric story from the main paper and told a local reporter to whip up some Southern Hemispecific words to add at the end.
I can't opine as to whether closings now are worse than they've been during the other 10 years I've lived here. The old-line department stores such as David Jones and Myer are under the pump, fer sher. But even in my more acquisitive days, the wife and I eschewed them. Too posh. I always notice ebbing and flowing with storefronts as I ride the trams. No sense whether that's more intense. I don't go to malls, so what do I know?
The cafe culture, especially places that serve coffee (Oz's national mania, and they're damned good at it!) is vibrant. Smashed Avo on Toast with a Flat White (Aussie cappuccino) is on everyone's lips. Even the crazyppl I work with are coffiends. It's part of the relaxed, "noworriesmate" vibe in the land of the Lotus-Eating latte-sippers. Or perhaps it just appears that way to me in my privileged person in a well-salaried situation.
Bed Bath & Beyond has just gotten into trouble. It's certainly not Sears Holdings, which looked like a dead corporation walking for years. It may still be, but its life has been extended for at least a year.
DeleteThe Guardian, the paper read by the people who think they ought to run the UK? Yeah, it's my favorite British paper, even to the point of recommending it to my students for its environmental coverage. Thanks for that link.
Australia is almost certainly not as over-malled and over-stored as the U.S., so I'm not surprised that store closings aren't as bad there.
I love coffee! It's not a coincidence that I'm a director and officer of Coffee Party USA.