U.S. retailers have already closed more stores this year than in 2018 and Bed Bath and Beyond is next in line! To appease their stockholders, they are prepared to close stores if Landlords don’t cooperate with their strategy to reduce occupancy costs. Will this affect your neighborhood Shopping Center?
Retailer Bed Bath & Beyond Inc. is looking to cut costs this year by negotiating more favorable leases for its more than 1,000 stores and closing at least 40 of them.
The closings would be partially offset by 15 store openings in 2019.
In the fourth quarter last year Bed Bath & Beyond closed 21 stores and opened three new ones.
All told, the closings and openings represent a fraction of the retailer's more than 1,500 physical outlets, which also include Christmas Tree Shops, Christmas Tree Shops andThat! Harmon Face Values, buybuy BABY and World Market, Cost Plus World Market or Cost Plus.
The home-goods seller is pursuing better profitability rather than to spike revenue.
They reported net sales for the fiscal 2018 fourth quarter were about $3.3 billion, an 11% drop compared to the prior-year period.
Bed Bath & Beyond has struggled to compete against online outlets such as Amazon and retailers like Target, Walmart, and HomeGoods, a battle that's stunted its revenue and driven down its stock price.
The chain has undertaken a strategy which includes reducing occupancy costs and cutting back on the use of the chain's trademark "20% off" coupons.
But those efforts, and the fourth-quarter results, have not appeased activist shareholders.
During the earnings call Bed Bath & Beyond completed a comprehensive review of its leases, and talks are now taking place with landlords on lease re-negotiations.
The number of store closures could grow beyond 40 if negotiations don't yield results.