Bed Bath & Beyond is slashing skus and consolidating vendors
Beyond Inc. has jettisoned millions of skus as it walks away from a broader marketplace model for key nameplates like Bed Bath & Beyond and Overstock.com.
Murray, Utah – Beyond Inc. has jettisoned millions of skus as it walks away from a broader marketplace model for key nameplates like Bed Bath & Beyond and Overstock.com.
Since April of 2024, the company has reduced Bed Bath & Beyond’s sku count from 12 million to just under 6 million at the end of November. The company slashed an additional 1 million skus and 800 more vendors in December, according to Beyond president David Nielsen.
“Bed Bath & Beyond was never meant to be a marketplace,” he told investors during this morning’s Q4 review call. “We’re curating a sharper, more efficient product mix.”
As a result, conversion rate began trending up in December. Similar finetuning is taking place at Overstock.com, he added.
Executive chairman Marcus Lemonis said the vendor and sku reduction work is ongoing in a strategy to improve experience and enhance margins. The company is targeting products that sold poorly, created a bad site experience or only sold because they were over-promoted or over-discounted.
“Those days are over,” he said.
Fewer, Stronger Relationships
In addition to culling vendors who aren’t driving profitability, Beyond Inc. is working to forge strong ties with key legacy partners in power categories for its nameplates, said Neilsen. As performance improves, vendors will receive access to more locations on the website in exchange for better costs associated with that as they get more volume flow-through.
Lemonis suggested that the benefits will extend to omnichannel retail as well.
“Those vendors who understand how to be good partners are going to get the lion’s share of our businesses, especially when we press ‘Go’ and we start opening stores and we start spending money again [to drive] e-commerce business, he explained.
However, for the time being, the company expects revenue to remain constrained as Beyond Inc. focuses on improving margins, conversions and EBIDTA.
“I’m confident to tell you that believe that the worst is absolutely, 100% behind us,” Lemonis told vendors. “Now, I’m required to qualify things. Like ‘that assumes market conditions don’t eradicate.’ But for the most part, if the world stays the way it is today, we are headed in a very, very positive direction.”
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