Company Overview:
Bed Bath & Beyond Inc. and subsidiaries (“BBB”) operates a chain of retail stores under the names Bed Bath & Beyond in the United States, Canada and Mexico, as well as, World Market, Cost Plus World Market, Christmas Tree Shops, and That!, Harmon, Harmon Face Values and buybuy BABY in the United States. The Company is also a partner in a joint venture, which operates retail stores in Mexico under the name Bed Bath & Beyond.The Company was founded by Warren Eisenberg and Leonard Feinstein in 1971 when they opened their first store in northern New Jersey called Bed ‘n Bath. By 1985, the Mr. Eisenberg and Feinstein were operating 17 stores in the New York metropolitan area and California. They also opened their first superstore in 1985 and changed their name to Bed Bath & Beyond.
Through its retail stores the Company sells a wide assortment of domestics merchandise and home furnishings primarily for the bedroom and bathroom. The Company’s over 1,400 stores principally range in size from 15,000 to 50,000 square feet, with some stores exceeding 80,000 square feet. Bed Bath & Beyond has 1,014 locations in 2014. Additionally, the Company includes Linen Holdings, a business-to-business distributor of a variety of textile products, amenities and other goods to customers in the hospitality, cruise line, food service, healthcare, and other industries.
The Company’s objective is to be the customer’s first choice for products and services in the categories offered, in the markets in which the Company operates. The Company’s strategy is to achieve this objective through excellent customer service, an extensive breadth and depth of assortment, everyday low prices and introduction of new merchandise offerings, supported by the continuous development and improvement of its infrastructure.
Financials
Bed Bath & Beyond is a publicly traded company on the NASDAQ under the symbol “BBBY”. The Company’s stock price was trading at $73.54 as of review date. The stock’s low point over the last year was $54.96. BBB’s fiscal year end is March 1st. Trailing twelve months as of 11/29/14 Revenue is $11.75B, Gross Profit of $4.57B and EBITDA of $1.79B. As of quarter end 11/29/14, BBB had $1.18B of Cash on their balance sheet. BBB has a Market Cap of $13.35B and 181.57M shares outstanding. The Company has exhibited single digit Revenue growth over the last 3 fiscal years and their Net Income has remained relatively flat year over year. Analysts that cover BBB expect similar modest revenue and profitability growth in the future.The Company appears to be at the mature stage of it’s life cycle as evidenced by it’s single digit growth year over year. The Company’s modest Revenue growth appears to be a result of new store openings, approximately 13 new stores openings on average per year, as well as an increase in e-commerce sales. The Company’s Revenue is largely dependent on the recovery of the Housing Market, which has seen in improvement since the most recent economic downturn.
Company location
BBB is headquartered in Union, NJ. A majority of BBB’s 1,000+ retail locations are in California, Texas, New York and Florida.
Employment
BBB has over 47,000 employees and offers multiple positions in its retail locations including sales and customer service associates as well as division and store managers. Average salaries for sales and customer service associates range from $9.00 to $10.00 per hour. Management positions range from $50,000 to $73,000 in annual salary.The Company appears to have a positive work environment for its employees as evidenced by employee’s reviews. Some employees voice complaints about lack of training, company’s stinginess or repetitive nature of job. However, overall employees enjoy the company’s culture and working with their colleagues.
Marketing Approach
BBB does not seem to do much marketing through TV and media. Most of the marketing outreach I’ve seen is through direct mail and e-mails. The Company frequently mails 20% coupons that can be used for a single product purchased in store (not available for Online purchases). This is very attractive for larger purchases, especially for kitchen/coffee electronics or dishware with typical retail cost above $100. Additionally, they mail out a monthly catalog that typically has a $5 coupon that can be used for a single product.BBB conducts e-mail marketing in which they e-mail you 20% coupons that can be used for a single product and includes online purchases. E-mail distribution seems to be less frequent than their direct mail distribution. I believe their e-mail database comes from sales associates requesting buyers e-mail addresses during in store purchases or when an online purchase is made.
Bedbathandbeyond.com website traffic sources comprise:
- Direct 20.73%
- Referrals 15.11%
- Search 58.76%
- Social 1.62%
- Mail 1.51%
- Display 2.27%
Like 20.73% of website visitors, I typically go directly to their site as they are the most well-known retailer for bedroom, bath and kitchen products. I will always check their website directly when I’m seeking to purchase products in these categories.
A majority of their Referrals appear to be from wedding oriented websites such as theknot.com and weddingwire.com. BBB is a top retailer for wedding registries. Many couples seeking to register will manage their registry on the website. And guests looking to purchase gifts on those registries will visit the website to make a purchase.
Vendors
The Company sells a combination of products purchased directly from manufacturers or wholesale distributors. Vendors are mostly US wholesale distributors/importers. Their vendors supply BBB with private label and licensed or branded goods. For example, the retailer’s home cleaning products are supplied through a distributor selling under the brand Casabella.
Size of Operation
With over 100 store locations and $11B+ in Revenue, BBB is considered a very large volume retailer in terms of orders and customer size.
Customer Service
Bed Bath & Beyond is famous for their liberal return policy. Basically, you can return any item sold at BBB to any store, regardless if it was even purchased at a BBB. There does not seem to be any time limit on this as I’ve returned items that I purchased, without a receipt years after use. They gladly accept returns and do not require the item to be in its original condition or packaging. If you purchase online, the order will come with a pre-paid shipping label so you can process your return for free and send back to their returns processing center. It cannot be any easier.
BBB has a 24/7 customer service phone number as well e-mail support. They also have a link on their Website to submit customer feedback.
Resellerratings.com indicates a score of 4.67 out of 10 for customer service. The below average score is related to several complaints about delayed shipping times or discontinued products. I personally have never had any issues with timely receipt of Online orders. Packages usually arrive in less time than indicated on the order confirmation.
Shopping Experience
I have found the in store shopping experience to be satisfactory. The upside is that they have knowledgeable staff and a very large selection of inventory in the categories they sell. The downside is, and this is in their NYC stores, the lines can be very long to check out and even longer when you need to return/exchange goods at their Customer Service desk. Additionally, it is difficult to find an associate to assist you and there is limited staff on the floor.
The Online shopping experience is satisfactory as well. Their Website seems to be older and not as clean as other major retailer Websites such as Wal-Mart and Target. However, I have never had any issues finding an item by either entering the item in the Search box or finding it by brand or category on their dashboard tabs. They have a lot of search options such as “by brand”, “by color”, “by price”, etc. The checkout experience is pretty seamless and secure. It does not take long. My only issue is that you are not able to use the 20% coupons you receive in the mail towards Online purchases, only the e-mail offers you receive. They offer free shipping on orders above $49, which is great. They have a 24/7 Hotline that offers support in case any issues are encountered.
Competitors
Since the liquidation of Linens ‘n Things, Bed Bath & Beyond has few major retail competitors except Walmart, Target, J. C. Penney, and some mid-sized players like Pier 1 Imports. Companies such as Crate & Barrel, IKEA and the numerous Williams-Sonoma companies (e.g. Pottery Barn and West Elm) are also competitors.
Pros and Cons
Pros:
- Easy liberal return and exchange policy
- Frequent distribution of 20% coupons
- Incredible selection in all home categories
Cons:
- Long lines in stores
- Difficult to get an associate to assist you, especially in the Registry section
- Extra charge for gift wrapping
Final Words
Bed Bath & Beyond is one of the only retailers with the breadth of selection in the home category. You can pretty much find anything you are seeking when it comes to a kitchen, bedroom or bathroom item. It is also where most couples decide to do their registry. While they don’t discount their products like some retailers who have frequent sales or offer below MSRP prices, BBB does frequently mail out 20% off single item coupons. I have never had any issues with their products or service and I will continue to be a loyal customer. I highly recommend this company for your next Online home purchase.
Bed Bath & Beyond’s Current e-Store Info Ratings
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