Bed Bath & Beyond’s CEO was removed Wednesday, as the home retailer struggled to meet consumer needs and experienced a decline in sales.
Despite price discounts, the company saw sales drop by 25%, according to its first quarter financial report. Board of directors member Sue Gove will step up as interim CEO, replacing Mark Tritton, who was previously the chief merchandising officer at Target.
“We must deliver improved results,” Gove said in a statement. “Top-tier execution, careful management of costs, greater supply chain reliability, prudent capital spending, a stronger balance sheet and robust digital capabilities will all be important to our success.”
Is Bed Bath & Beyond going out of business?
The company has had issues with inventory in the past. Previously, the retailer had too many products in the stores, while more recently, the stores didn’t have enough inventory because of supply chain problems, turning customers away.
Bed Bath & Beyond’s stock price dropped by 24% in Wednesday trading, closing at $4.99 per share. While competitors like Walmart and Target have maintained steady traffic, Bed Bath & Beyond has seen its traffic decrease by 20-30% year-over-year, CNN reported, citing analysts at Riley Securities.
The company also suffered the recent resignations of two senior vice presidents in finance, raising concerns about its leadership.
“In our view, Bed Bath & Beyond has, quite simply, been run into the ground and a change of management is the only way of restoring some credibility with investors,” Neil Saunders, managing director at GlobalData, said in an analyst note.
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Are Bed Bath & Beyond stores cutting back on air conditioning?
A report from Bank of America claims Bed Bath & Beyond has curtailed air conditioning use to decrease costs in light of the sales woes, although the company denied the allegation, saying any changes in store temperature did not come from corporate.
“We’ve been contacted about this report, and to be clear, no Bed Bath & Beyond stores were directed to adjust their air conditioning and there have been no corporate policy changes in regard to utilities usage,” a representative told CNN.
Bank of America analysts who conducted store visits reported reduced operating hours, scaled back utilities and canceled store remodeling projects.
Rewards program revised
The company introduced a new loyalty program Welcome Rewards, where customers could gain points through purchases at the retailer’s stores.
Shoppers could join Welcome Rewards (free) or Welcome Rewards+ ($29 per year), or apply for a Welcome Rewards credit card. The former loyalty program Beyond+ offered 20% off purchases, whereas Welcome Rewards+ offers 15% off purchases, although the new program brings extra rewards.
“We are committed to providing customers with a one-stop destination to meet their needs through our assortment, experience and services, whether online or in stores,” Gove said.