The messy beauty of Bed Bath & Beyond doesn’t fit the internet age

Here’s the deal: Shares tumbled more than 20% Wednesday after the company announced layoffs and store closures in its latest effort to patch the ship. It is laying off about 20% of its employees. It will close about 150 of its roughly 950 brick-and-mortar stores. To keep the lights on, Bed Bath & Beyond has secured a $500 million financial lifeline — a major loan it hopes will buy time and prevent sellers from rushing out.

Here’s what the interim CEO said: “We embrace a straight forward and back to basics philosophy focused on serving our customers better, driving growth and delivering business returns.”

Coupons are out of fashion.

  • Bed Bath & Beyond was a discount shopper’s dream in the ’90s. It had a million different brands and won a loyal customer base through a coupon strategy that often rewarded shoppers with 20% off or more.
  • Now, these discounts can be easily found online, and Bed Bath & Beyond has been way off the e-commerce curve when compared to competitors like Target and Amazon.

The size is out of regulation in.

  • Stepping into the ’90s Bed Bath & Beyond physical store was the ultimate equivalent of a tour of the Wonka factory. You can get lost in mountains of bathroom mats, cutlery, GoodGrips and every As Seen On TV your little 30-something heart could desire. The internet store was before the internet. A little everything, everywhere, at once.
  • The problem with abundance is that it is overwhelming. Nobody wants to sort through 300 shower curtains to find the one they like. Come stock up, just do the work for me and give me, like, a dozen max.

The discount has its limits.

  • Bed Bath & Beyond has always been a destination for premium brands, who don’t like to be tainted by red-line discounts.
  • According to our analyst: “If you’re Dyson and Keurig and you’re trying to maintain an aura above your brand, the last thing you want is a discount.”

stock meme mess.

  • Bed Bath & Beyond shares got a big boost this spring when Ryan Cohen, co-founder of Chewy.com, acquired a controlling stake. Among the non-professional online investors, Cohen holds the credibility mark as a vanguard of GameStop’s career since early 2021.
  • His followers piled into stocks, believing that their hero would work his magic and use the power of shareholders to force change in the company.
  • Only five months later, Cohen was released on bail, sold his entire stake and Net profit of $60 million.
  • why? Cohen does not say. He left others to speculate that he felt the company either could not be salvaged or was not worth the effort.

What’s Next?

First, a lot of pain for the staff. Sellers are likely to be reassured with an infusion of cash, but at the end of the day, the company still has a lot of debt. It’s a tough time – as inflation eats up demand for household goods and supply chains are still untangling themselves – for any retailer to undergo the kind of extreme change that Bed Bath & Beyond needs.

Today’s number: 132000

private sector Added 132,000 jobs in August, the ADP reported on Wednesday – well below the 268,000 jobs added in July – indicating that the pace of US hiring may be slowing, according to payroll data. An economist expected the August number to be around 225,000.

“We may be at an inflection point, from highly charged job gains to something more normal,” said Nella Richardson, chief economist at ADP, which tracks private sector employment. “My conclusion from these numbers is that companies are slowing down the number of their additional employees.”

Alert: The ADP’s report was historically released on Wednesday before the government’s official monthly jobs report, and has usually been seen as a preview of what’s to come. But in recent years, the ADP number has lost some credibility, often falling far short of the official tally. This prompted the company to revamp its methodology, and this is its first report since the completion of this transition. Tune in Friday to see how you stack up with the official report from the Bureau of Labor Statistics…

Cheers

Here at Nightcap, we love the smooth finish, so let’s finish with some nice little news:

The bourbon boom has been strong, and earnings this week suggest Wall Street is still wild about whiskey, My colleague Paul R La Monica writes.

Brown-Forman, owner of Jack Daniels Inc., reported earnings that easily beat expectations.

  • Sales rose 11% to $1 billion, topping estimates of $978 million.
  • Earnings increased 30% to $249 million, or 52 cents a share. (Analysts had expected earnings of 47 cents per share.)

Inflation? Despite rising costs everywhere else, consumers seem willing to splurge on higher-priced bourbons, such as Woodford Reserve and Old Forester (also owned by Brown-Forman). Sales of those premium spirits are up 35% from last year.

The reason: 2022 may be marked by worrisome recessions and price hikes, but there’s a limit to what America says, YOLO let’s get drunk.

Brown-Furman noted that strong demand for alcohol at airports and on cruise ships helped drive sales. Also popular: the cocktail innovation in the can that finally made Jack and Coke in portable Drinkable.

Shares of Brown-Forman are up slightly on Wednesday, and the stock is up about 10% in the past three months, even as the broader market slumped. Notably, beer stocks such as Anheuser-Busch and Molson Coors have lagged.

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