Bed Bath & Beyond to slash skus as merchandising priorities come into focus

The new leadership at Bed Bath & Beyond is reworking its assortments to refocus on categories that were core to the legacy brick & mortar chain.

MIDVALE, UTAH – The new leadership at Bed Bath & Beyond is reworking its assortments to refocus on categories that were core to the legacy brick & mortar chain.

With the hiring last week of Stacey Shively as chief merchandising officer for the Bed Bath & Beyond e-commerce business, the platform will begin to curate complete solutions for key areas of the home, executives said during this morning’s Q1 review with investors.

“You will see us move away from marketplace-like assortment of 12 million skus to one that has enough breadth and depth to be category leading to our suppliers but is edited to ensure an easy shopping experience for our customers,” said Chandra Holt, who joined Beyond Inc. roughly 90 days ago as CEO of Bed Bath & Beyond.

Bed Bath & Beyond will concentrate on product categories within bedding, bath, kitchen and outdoor living. Each will be enhanced with room-specific furniture “being sold as an understandable adjacency,” said Beyond Inc. executive chairman Marcus Lemonis.

By bucket, Bed Bath’s assortment will include:

Bedroom: Bedding, pillows, mattresses, bedroom furniture, rugs, lighting, closet organization and décor.
Bathroom: Towels, rugs, curtains, vanities, mirrors, lighting, accessories and beauty and wellness.
Kitchen: Small appliances, tabletop, kitchen furniture, lighting and kitchen accessories.
Patio: Furniture, grills, smokers, heaters, games, lighting, other backyard toys and accessories.

During Beyond Inc.’s first quarter, which ended March 31, Bed Bath’s legacy categories of bedding, bath and kitchen delivered triple digit growth in GMV (value of goods sold), according to Holt.

The mix will be sharpened with an eye to addressing key life moments, including baby, weddings, college, first home and home renovations. Holt noted that in Q1, GMV for baby shot up 211%.

“I believe building on brand equity while modernizing the customer experience is the formula that will deliver differentiation and long-term profitable growth,” she added.

Overstock becoming the hub for furniture and hot deals

Overstock.com, which began its relaunch on March 28, will be anchored by core categories of furniture for throughout the house and supplemented with rugs, patio, apparel, footwear, jewelry and a variety of vendor-supplied special buys.

“We intend to further leverage the Overstock brand as the leader in excess, factory direct liquidations and reverse-logistics businesses,” said Lemonis.

To build on that positioning, Beyond Inc. is currently finalizing terms for a partnership with one of the largest liquidators in America.

Lemonis acknowledged that shifting the bulk of the furniture business back to the resurrected Overstock.com business will bite into Bed Bath & Beyond’s top line, making the latter even more heavily reliant on small-ticket products. But the benefit of building higher big-ticket business at Overstock is expected to counter-balance that.

“We will still see bedroom furniture at Bed Bath, but we will have pulled away all those non-obvious items,” he said.

One of the biggest challenges over the past last 60 days has been “threading the needle” at Bed Bath & Beyond as the company slowly shifts furniture to Overstock in a way that would be seamless to the customers, he added.

“We have taken it in the teeth for a few weeks,” Lemonis said.