After a disappointing Q2 earnings report a little over a month ago, Bed Bath & Beyond announced several new initiatives this week designed to boost business and increase its reach, starting with a new Uber deal.
On Monday, customers could order “essential baby and home products” from more than 750 Bed Bath & Beyond and 120 buybuy Baby stores with delivery through Uber and Uber Eats, services run by the San Francisco ride-sharing and delivery giant.
Rafeh Masood, chief digital and interim chief brand officer for Bed Bath & Beyond who was recently named chief customer officer in a newly combined role, said the partnership signals how the retailer is “rebuilding our authority in the home and baby retail categories to appeal to new consumers, while strengthening relationships with our valued, long-standing customers.”
Delivering through Uber “is a terrific way we are reaching new customers,” Masood added, “and the fact that buybuy Baby was chosen to help launch Uber’s baby and kids delivery vertical reflects the brand’s leadership in welcoming customers to parenthood. We are excited to begin this journey with Uber and look forward to having their innovative services market and deliver products from Bed Bath & Beyond and buybuy Baby right to customers’ doorsteps.”
The retailer also struck a similar partnership to directly offer Kroger customers an extensive selection of goods for the home and baby products carried by Bed Bath & Beyond. The products will be offered through Kroger.com as well as a small-scale physical store pilot at select Kroger Family of Companies stores beginning in 2022.
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The multi-category omnichannel collaboration will include popular items—from bedding and storage to baby furniture and gear—from Bed Bath & Beyond and buybuy Baby’s assortment, including the company’s owned brands, as well as national brands.
“Today’s announcement is a key milestone, bringing Bed Bath & Beyond and buybuy Baby products to reach more customers than ever before,” said Mark Tritton, president and CEO of Bed Bath & Beyond. “Our product assortment combined with Kroger’s customer base will present extensive opportunities for current and future customers.”
Along with the Kroger partnership, Bed Bath & Beyond will launch a new digital marketplace to expand its assortment of key products from a selection of third-party brand partners that will be seamlessly integrated into the Bed Bath & Beyond digital platform.
These expanded shopping options come as the company prepares for the impending holiday shopping season. Its “Holiday, Happier,” initiative includes a new video series featuring tips from its “Home, Happier” team, kicking off on November 8.
The company also announced new functionality on its mobile app to make holiday shopping easier, as well as a free trial for its Beyond+ loyalty program, available through December 31. The retailer also launched its Black Friday promotions this week, with early deals leading up to the official sale weekend, Nov. 25-27, when customers can score bigger discounts and an additional 25 percent off purchases.
To help facilitate all these initiatives, Bed Bath & Beyond also announced leadership changes, with several taking on new roles.
Anu Gupta—who has served as the company’s chief strategy and transformation officer since September 2020—has been named chief growth officer. This newly created position will focus on internal and external growth opportunities, and Gupta will be working cross-functionally to continue managing the company’s business transformation. She will be responsible for driving growth through the development and incubation of strategic partnerships and management of an increasingly expanding revenue ecosystem, while helping maintain the core business.
“With these sales channel expansions, it is necessary to evolve our organizational structure to align with our ongoing transformation,” Tritton said. “As part of that evolution, we are thrilled to promote Anu Gupta into an expanded role. As an instrumental driver of our new Kroger collaboration, Anu’s impressive background and business acumen, visionary ideas, and successful tracking of our transformation management will help lead our team into the future.”
Gupta and Masood’s appointments are effective immediately and both will report to Tritton. John Hartmann, Bed Bath & Beyond’s chief operating officer and president of buybuy Baby, will be responsible for partnership execution, in addition to his leadership across IT and supply chain.
“Rafeh and John have been influential leaders as we have pivoted our business strategically and operationally as an omnichannel retailer,” Tritton said. “Many of the transformational improvements and capabilities across our digital platforms and supply chain have been a result of both Rafeh’s and John’s invaluable leadership and their new and expanded roles will lead to greater synergy between our business roadmap and customer approach.”
In addition to those moves, Bed Bath & Beyond also announced that it expects to complete its $1 billion three-year share repurchase plan by the end of fiscal 2021, two years ahead of schedule. Program-to-date, the company has completed $600 million in share repurchases since the end of fiscal 2020. The company now expects to repurchase the remaining $400 million of the program by the end of fiscal 2021, specifically over the third and fourth quarters.
The program has become even more important for the company after its lackluster second quarter earnings, which saw a 1 percent comp decline, with total net sales at $1.985 billion for the second quarter.
“We continue to execute our bold transformation and implement successful strategies that will fortify our near-term and long-term value creation,” Tritton said. “This announcement further underscores our ongoing confidence in our turnaround, and our ability to simultaneously generate positive cash flow, maintain a strong balance sheet and invest in our long-term growth, all while returning significant capital to shareholders. We remain committed to our capital allocation framework of delivering strong and sustainable total shareholder return.”
In the first six months of the current fiscal year, Bed Bath & Beyond has executed approximately $225 million in repurchases with $100 million remaining under its $325 million plan for fiscal 2021. The total expected share repurchase amount for fiscal 2021 has now increased to approximately $625 million, nearly doubling the initial share repurchase plan of $325 million for the current fiscal year.
During the Q2 earnings call, Tritton announced the company would adjust its forecast for the remainder of the year, based on that quarter’s performance, as well as September numbers. And this week, he said the company’s latest moves play into that adjustment.
“As we continue to navigate the third quarter, the corrective and surgical pricing actions we’ve implemented are resulting in a trend toward expected gross margin rates for the period,” Tritton said. “Sales to date have remained consistent with the September trends we shared on our earnings call several weeks ago. Our focus remains on delivering comp sales growth in the all-important November month, which represents a disproportionately larger impact to our quarterly sales. We are preparing for the peak holiday season and are particularly excited about the new future sales channels that we’ve announced today, which are our strategic collaboration with Kroger and our own digital marketplace.”