The path to Bed Bath & Beyond's downfall
MELISSA BLOCK, HOST:
Bed Bath & Beyond is officially going out of business. Store closing sales begin on Wednesday. The home goods giant has outfitted many college dorms and homes with its floor-to-ceiling displays of pillows, curtains and kitchen gadgets. NPR's Alina Selyukh reports on its downfall.
ALINA SELYUKH, BYLINE: If you've been to Bed Bath & Beyond lately, you've seen the signs - a sparse selection of brands you don't recognize, a cul-de-sac of home decor sitting empty except for some tired-looking mirrors on sale.
DANIEL CALLAHAN: I'll be honest, I was taken a bit of back because, like, there are sections that were just missing.
SELYUKH: Daniel Callahan from Louisville, Ky., popped in a few months ago and found it eerie.
CALLAHAN: I remember when - like the Circuit City closing and the Sears closing, and this kind of had the same feeling to it.
SELYUKH: He was right - the store closed within weeks. Just a decade ago, Bed Bath & Beyond seemed unstoppable, called a category killer for dominating in home goods. Now it enters bankruptcy, distraught and turbulent. It's gone through leadership shakeups, failed turnarounds, a rise and crash as a meme stock, all while running out of shoppers and money. Beneath this chaos, the chain has faced a fundamental question - in a world that shops online, swarmed by competitors, where does it fit?
BETH GROSSFELD: Identity crisis is actually, I think, a key word.
BLOCK: Beth Grossfeld worked in Bed Bath marketing for 13 years, until 2019. Back then, the chain had about 1,500 stores, having ballooned from its origins as a New Jersey retailer from the 70s. It survived the Great Recession, outlived its main rival, Linens 'n Things, then bought buybuy BABY, the World Market, online retailer One Kings Lane. Its stores had a secret weapon - local managers got to decide what to stock for their shoppers.
GROSSFELD: It was that floor-to-ceiling - stack them high and watch them fly was kind of our motto. You came in, you found what you wanted and 10 other things. The customers loved it.
SELYUKH: And then there was the iconic big blue coupon for 20% off, which became so stitched into the cultural fabric that the FBI found one in the kitchen drawer of mobster Whitey Bulger. TV show "Broad City" built a whole subplot around it.
(SOUNDBITE OF TV SHOW, "BROAD CITY")
ABBI JACOBSON: (As Abbi Abrams) Bed Bath & Beyond coupons never expire.
JOHN GEMBERLING: (As Matt Bevers) They have expiration dates on them.
JACOBSON: (As Abbi Abrams) Yeah, to throw idiots off.
SELYUKH: But over time, Bed Bath faced intense competition from Amazon and Target, Wayfair and West Elm. Former officials describe a company lost in search of its niche. It tried to go big on furniture. It started selling jewelry. Its website felt dizzying. Here's former marketing manager Grossfeld.
GROSSFELD: We really were going through kind of a crisis of trying to compete with our ever-growing competitors.
SELYUKH: And never catching up. One of the founders recently told The Wall Street Journal Bed Bath, quote, "missed the boat on the internet." In 2019, activist investors forced out long-running leadership and brought on a Target executive, and he pushed to declutter stores and go all-in on private brands, which are more profitable. The timing proved disastrous. Big brands, like KitchenAid and Calphalon, went missing from Bed Bath shelves right as the pandemic began. The chain missed out on the historic home decorating shopping spree. Soon the company was closing stores and cutting jobs.
DAVID SILVERMAN: They've made operational missteps, which have yielded financial missteps.
SELYUKH: David Silverman tracks retail at Fitch Ratings.
SILVERMAN: The company is at a point where they can't really invest in sort of anything to turn around their fortunes.
SELYUKH: Bed Bath began warning of a bankruptcy in January. It struggled to pay lenders and suppliers, leading to more empty shelves. Leadership tried every financial Hail Mary, getting lifelines from banks and investors. But now the rescues are running out, and Bed Bath is staring into the great beyond. Alina Selyukh, NPR News. Transcript provided by NPR, Copyright NPR.