Bed Bath & Beyond, in peril over the pandemic, will be closing 200 stores over the next two years as its sales have plummeted 50 percent in the last quarter, CNBC reports.
The closings of a large portion of the company’s 1,478 stores will begin later in 2020, as the company attempts to right itself from the financial havoc of the past few months. Among those stores are 955 Bed Bath & Beyond stores, alongside other brands like Buy Buy Baby, Christmas Tree Shops and Harmon Face Values.
Online sales had previously skyrocketed during April and May, with customers turning to the digital side of things to buy cleaning supplies and home decor.
Bed Bath & Beyond's sales were down 49 percent from a year ago, falling from $2.57 billion to $1.31 billion. The online sales, however, were up 82 percent during the worst parts of the country's lockdown, which represented two-thirds of the company's first-quarter sales. Because of the shift to digital, gross margins fell 8 percentage points.
But it won't be enough to sustain all of their physical operations that had been the primary source of revenue. By closing the stores, Bed Bath & Beyond said it will save around $250 million to $350 million annually, without taking into account one-time costs. Chief executive Mark Tritton told CNBC that there were “a number of stores dragging us down,” and that the company planned to keep analyzing its options from here.
Tritton had positive words for the company's reopened stores, which he said were performing better than the company had projected as people continue to return to shopping in public life. Rather than panic-buying items like cleaning supplies, coffee and water filters, customers have shifted to bigger purchases like home decor, bedding and accessories.
Bed Bath & Beyond ended the quarter with $1.2 billion in cash and investments, and the company said it thought itself strong in its finances.
The company also recently put into place a three-year asset-based revolving credit facility with a group of financial institutions, which it hopes will boost its liqudity.