While Bed Bath & Beyond Inc. Executives insist the troubled retailer has a brighter future, many engaged couples have already issued their verdict: They don’t think the company will survive.
Since January, several thousand couples have removed Bed Bath & Beyond items from their registries for upcoming weddings on Zola Inc., an online wedding services platform. That represents a decline of more than 50% versus registries for nuptials that were held last year.
Bed Bath & Beyond has already disclosed that total revenue has plummeted in recent quarters. But the exodus of so many married couples-to-be underscores that the precipitous decline isn’t a temporary slump that will easily reverse course if the retailer is able to replenish its stocks of merchandise. The Bed Bath & Beyond brand has been deeply damaged by months of financial turmoil and warnings of a potential bankruptcy, leading many shoppers to give up on the retailer altogether.
By dropping Bed Bath & Beyond items from their registries, engaged couples are signaling they have doubts about whether Bed Bath & Beyond will even be around when they eventually get married — or at the very least, they’re indicating that they don’t want to deal with a retailer they suspect could still be troubled in the near future.
In a statement, a Bed Bath & Beyond spokeswoman said the company remains “steadfast” in driving its turnaround.
“We are taking steps to sustain and grow our business, including initiating a $120 million vendor program to build inventory,” she said. “At this critical moment in our journey, many customers are supporting us, and we value each and every customer who chooses Bed Bath and Beyond.”
‘Necessary Steps’
Since January, around 200 couples have emailed Zola’s customer service team to ensure Bed Bath & Beyond items they had listed on their online wedding registries were properly removed. Thousands of other couples simply removed Bed Bath & Beyond items on their own without going through Zola’s customer service. Zola says the decline is likely related to the retailer’s financial troubles. More than 2 million couples have used the registry website since it was founded in 2013.
Shoppers’ bearishness about Bed Bath & Beyond’s outlook contrasts with executives’ stated optimism about how their turnaround efforts are going.
“We are taking the necessary steps as part of our financial strategy to sustain and grow our business,” Chief Executive Officer Sue Gove said on April 10.
Many families continue to visit Bed Bath & Beyond and its Buybuy Baby brands “to find solutions for life’s special moments,” Gove added. “We have operated for more than 50 years, and we are determined to deliver for the long-term benefit of our stakeholders.“
But the Union, New Jersey-based retailer’s disappearance from so many registries illustrates the toll that the company’s recent financial strategy has taken on its core business. A worsening cash crunch has forced executives to come up with creative ways to drum up new financing.
In February, they launched a complex deal with hedge fund Hudson Bay Capital Management to raise as much as $1 billion. When that flopped in less than two months, Bed Bath & Beyond then launched a $300 million share sale — despite a plummeting stock price.
Bed Bath & Beyond needs those funds to pay its lenders. But the quick succession of complicated financial deals has kept executives and managers busy and made it difficult to focus on the day-to-day task of running stores.
Competitors Pounce
Meanwhile, competitors have seized on the opportunity. Babylist Inc., which has an online baby registry, is planning to open its first physical store in June — in part to compete against Buybuy Baby.
Amazon.com Inc., Target Corp. And Walmart Inc. Are among the biggest players in baby registries, Babylist CEO Natalie Gordon said in an interview. Buybuy Baby is the largest national specialty retailer, followed by her own company, she said. Babylist declined to say whether there have been any shifts in Buybuy Baby items registered on its site.
Zola, which also has its own online store for wedding items, has seen an uptick in sales of cookware, kitchen appliances and bedding in recent months as consumer reticence toward Bed Bath & Beyond grows.
While talk of the retailer’s bankruptcy “is very unfortunate, it has meant positive growth for Zola,” Shan-Lyn Ma, the co-founder and co-CEO of the company, said in a statement. “Couples trust Zola.”