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Is Bed Bath & Beyond’s Private-Label Push Enough to Overcome Out of Stocks?

Bed Bath & Beyond is still hoping its private-label push can salvage a transformation effort that has been upended by ongoing industrywide supply chain constraints.

The bedding and home décor retailer introduced Everhome, its ninth new private-label brand, offering a collection of bedding, bath linens and accessories, decor and outdoor furnishings available in the company’s stores and online.

The Everhome assortment offers an “easy and elegant” coastal-inspired aesthetic, with what the retailer calls “warm and welcoming styles” crafted for everyday living at accessible prices.

“We’re thrilled to launch our ninth Owned Brand, Everhome, as home design enthusiasts continue to refine their indoor and outdoor spaces with the changing of the seasons and in time for the start of summer,” said Joe Hartsig, executive vice president and chief merchandising officer at Bed Bath & Beyond. “Everhome features the perfect mix of contemporary classics in a curated collection we know consumers will love to showcase throughout their home.”

The Everhome collection is inspired by America’s coastal regions, from sunny California to the southern charm of Charleston, S.C. or classic New England style, the company said.

Bedding products include sheets and pillowcases, duvet/comforter and sham sets, quilts, throws and throw and decorative pillows. Bathroom items include bath furniture, towels, bath rugs, shower curtains, soap dishes and dispensers and bath accessories.

As part of the new label, Bed Bath & Beyond also offers outdoor furniture and garden collections across dining, lounge, bistro and bar, as well as other related items such as umbrellas, lantern, planters, dinnerware, serveware, table textiles and décor. And for indoor décor, the company is debuting a new slate of decorative mirrors, frames, shelves, decorative storage baskets, lighting, decorative objects, window treatments, wall décor and art.

“Everhome is purposeful and versatile, fulfilling our continued aspiration to create easy and flexible living spaces,” said Neil Lick, senior vice president of owned brands at Bed Bath & Beyond. “The collection provides a home that works for all our needs and communicates a welcoming airy style appreciated across generations.”

In an April earnings call, CEO Mark Tritton indicated that the retailer’s owned brands generated a run rate of approximately 25 percent of total sales to close 2021. This percentage exceeded the company’s 20 percent goal for the year, and is well above the 10 percent of sales that private-label brands generated in 2020.

A March study from Emarketer indicated that 89.7 percent of U.S. consumers say that they switch from a national brand to a private label brand simply because they found it to be a better value. Bed Bath & Beyond appears to be falling in line with the preference for affordable pricing, offering bedding items as low as $35. Additionally, bath items start at $8, while décor merchandise begins at $10 and outdoor goods start at $4.

Although private-label brands are known to generate higher margins for retail businesses, Bed Bath & Beyond still has to get these products out in front of the consumer if it wants to facilitate a long-awaited turnaround. When it initially detailed a $250 million omnichannel transformation plan in late 2020, the idea was to move from a de-centralized inventory management approach to an “omni-always” centralized ordering and replenishment system. The Union, N.J.-based retailer works with tech titans including Google Cloud and Oracle, as well as supply chain tech provider Relex Solutions, to help support improvements across merchandising, inventory management and planning.

After closing 200 stores since 2020, the bedding and home décor chain is currently remodeling 450 location by 2024 in an effort to reduce SKU count and ultimately mitigate the clutter that often marks the company’s physical store experience.

But with supply chain and labor constraints keeping goods out at sea for weeks at a time and contributing to product delays, the problem for Bed Bath & Beyond has been out of stocks and lost sales. In back-to-back quarters, sourcing issues and receipt flow contributed to $100 million in lost sales during the 2021 holiday, and $175 million for the full fourth quarter. During the latest period, the company also reported a $159 million net loss.

With fourth-quarter comparable store sales at Bed Bath & Beyond declining 15 percent, the company—which also operates the BuyBuy Baby and Harmon Face Values banners—will also be banking on more warehouse space to help push its owned brands across channels.

The company opened the first of four new regional U.S. distribution centers in Pennsylvania in late 2021, and is currently slated to open a second distribution center for the West Coast later this year.

Everhome is the first private label Bed Bath & Beyond introduced this year, after the retailer launched eight owned brands in 2021. Most recently, the company debuted H for Happy, a collection of holiday-inspired and seasonal celebratory home goods.

Bed Bath & Beyond’s owned brands also include bedding and sleep label Nestwell; household assortment Simply Essential; modern bath essentials line Haven; contemporary home and soft goods line Studio 3B; modern kitchen and dining wares collection Our Table; eclectic home goods label Wild Sage; and storage and cleaning assortment Squared Away.

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