Bed Bath & Beyond Inc. (NASDAQ:BBBY) today provided shareholders with a positive update on its turnaround efforts, boosting BBBY stock.
The domestic goods retailer has been struggling as of late, with BBBY stock spending most of the summer in freefall, having lost over 60% since April. The company has been waylaid by a myriad of issues such as poor quarterly performance, excessive inventory, an excessively broad portfolio, and an inefficient supply chain, all of which have contributed to investors flocking from BBBY stock in their droves. The biggest problem for BBBY is how long these issues have been allowed to fester, with 90% being knocked from the company’s shares in the last five years.
In a letter to shareholders, interim CEO Mary Winston and board chairman Patrick Gaston provided an update on how BBBY is fundamentally changing its approach in a bid to transform the company’s fortunes. Having ousted former CEO Steven Tamares earlier this year, the company expects to make an announcement on his permanent replacement “in the coming weeks,” although it is not known if Winston is a candidate.
The company also plans for significant remodeling of 160 of its 1,100 Bed Bath & Beyond stores in a way that is “clearly visible to the customer and favorably impact the in-store shopping experience over the short term,” which the company hopes will help reignite falling foot traffic as a result of increased online spending. BBBY stock will also be helped by an aggressive campaign of inventory reduction, which will see $1 billion worth of stale goods moved on in the next 18 months.
Perhaps the biggest boost for BBBY stock will come from the company’s plans for divesting and store closure of its lesser divisions. The company confirmed last week it is working with Goldman Sachs (NYSE:GS) to evaluate potential asset sales, of which the major one is its Cost Plus World Market brand, which has revenue of $858 million USD according to CrunchBase. It is reported that former CEO Tamares is leading a consortium to take over this division.
Bed Bath & Beyond has said it expects to offer further updates when the company posts its next quarterly earnings in October, but based on today’s update it would appear that there is finally light at the end of the tunnel for BBBY stock.
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