The Demise of Bed Bath & Beyond: A Cautionary Tale of Coupon Culture and Mismanagement

After more than 50 years in business, Bed Bath & Beyond has filed for bankruptcy, with plans to begin closing its 360 Bed Bath & Beyond stores and 120 BuyBuy Baby stores. The company's financial struggles have been ongoing for years, with several misfired turnarounds, abrupt leadership shakeups, a rise and crash as a meme stock, store closures, job cuts, and numerous last-gasp financing deals. The company had been known for its ubiquitous 20% off coupons, which were used to draw shoppers into its maze-like stores.[0] However, the coupons eroded the company's profit margins, hurt its brand image, and trained customers to only shop at stores if they had a coupon.[1] This made it much harder for Bed Bath & Beyond to sell merchandise at full price, as customers began to perceive the company's products as overpriced unless they had a coupon.

The company tried to move away from coupons during the 2010s after they squeezed profit margins, but it was too little too late. The company's demise is sad, as it was once deemed a “category killer” for its triumph over many rivals. The store where families bought a bathmat and a blender in 2004 could not keep up in the modern world, and now it will die, and its creditors will fight over what little is left after Bed Bath's going-out-of-business sales.[2]

The demise of Bed Bath & Beyond, which was founded in 1971 and grew into one of the country's largest big-box chains, is not, as some pundits have insisted, an example of the inevitable decline of brick-and-mortar retailers that struggle to compete against Amazon.com Inc.[3] Instead, Bed Bath & Beyond is largely responsible for its own undoing, according to suppliers, analysts, and former managers and employees.[3] For nearly a decade, the retailer's leadership teams made decisions that pushed the company, little by little, toward the brink of financial collapse.[3]

The bankruptcy filing of Bed Bath & Beyond has established Ryan Cohen and Jake Freeman as exceptional beneficiaries of the meme stock.[4] The meme-stock champion and college student cashed out roughly $180 million in combined profits from the homeware retailer's stock in August, less than eight months before the company's bankruptcy filing on Sunday.[4]

Customers have until May 8 to use gift cards, gift certificates, and loyalty certificates.[5] The deadline for returning items bought before April 23 is May 24.[6] The company has secured a $240 million loan to help fund its operations during bankruptcy.[0] The remaining 360 Bed Bath & Beyond and 120 Buy Buy Baby stores will remain open for now, with closing sales beginning this week.[7]

Bed Bath & Beyond's bankruptcy filing comes as a result of several years of financial struggles, store closures, job cuts, and unsuccessful turnaround attempts. The company's ubiquitous 20% off coupons eroded profit margins and hurt the company's brand image, making it much harder for Bed Bath & Beyond to sell merchandise at full price. The company tried to move away from coupons during the 2010s, but it was too little too late. The demise of Bed Bath & Beyond is sad, as it was once deemed a “category killer” for its triumph over many rivals.[2] However, the company is largely responsible for its own undoing, according to suppliers, analysts, and former managers and employees.

0. “Bed Bath & Beyond plans to liquidate all inventory and go out of business” CNN, 24 Apr. 2023, https://www.cnn.com/2023/04/23/business/bed-bath-beyond-bankruptcy/index.html

1. “How coupons backfired on Bed Bath & Beyond” East Idaho News, 24 Apr. 2023, https://www.eastidahonews.com/2023/04/how-coupons-backfired-on-bed-bath-beyond

2. “Bed Bath and Beyond's bankruptcy was dumb, sad, and typical of our moment.” Slate, 24 Apr. 2023, https://slate.com/business/2023/04/bed-bath-beyond-bankrupt-stocks-retail-dumb.html

3. “Bed, Bath & Beyond plans to swiftly liquidate, close all stores” Crain's Chicago Business, 24 Apr. 2023, https://www.chicagobusiness.com/retail/bed-bath-beyond-plans-liquidate-close-all-stores

4. “Cohen, Freeman made $180 million on BBBY stock ahead of bankruptcy” Markets Insider, 24 Apr. 2023, https://markets.businessinsider.com/news/stocks/cohen-freeman-activist-college-student-bbby-stock-price-meme-bankruptcy-2023-4

5. “Bed Bath & Beyond in Wilmington to close as company enters bankruptcy” StarNewsOnline.com, 23 Apr. 2023, https://www.starnewsonline.com/story/news/local/2023/04/23/bed-bath-beyond-in-wilmington-to-close-as-st-files-for-bankruptcy-as-wilmington-store-to-close-soon/70143310007

6. “Sioux Falls Bed Bath & Beyond to liquidate inventory this week” Dakota News Now, 24 Apr. 2023, https://www.dakotanewsnow.com/2023/04/24/sioux-falls-bed-bath-beyond-liquidate-inventory-this-week/

7. “Bed Bath & Beyond customers have just days to use coupons after company files for bankruptcy” WMUR Manchester, 25 Apr. 2023, https://www.wmur.com/article/bed-bath-and-beyond-bankruptcy-42423/43690084

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