Bed Bath & Beyond (BBBY) Reveals Next Step In 3 Year Transformation With Launch Of At Least Eight Customer Inspired Owned Brands In 2021
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Bed Bath & Beyond (Nasdaq: BBBY) today announced the biggest change in its product assortment in a generation, with plans to launch at least eight new Owned Brands in fiscal 2021, with six of these being launched sequentially in the first six months of the fiscal year. Marking another major step in its recently announced comprehensive growth strategy, the Company will launch thousands of new products available only at Bed Bath & Beyond to drive differentiation, preference, and authority in the $180 billion Home market.
These Owned Brands will connect with the core customer and category segments across bed, bath, kitchen/dining, storage/organization, and home décor, all key destination categories for the Bed Bath & Beyond banner that represent over 60% of its revenue. The Company will also launch its first cross-category, opening price point Owned Brand, with the first six new Owned Brand assortments launching ahead of the important Back to College and Holiday seasons.
Bed Bath & Beyond is number one in terms of consumer brand association in bed, bath and kitchen, as well as a leader in other home categories. The Company expects its new Owned Brands to further enhance its authority in these key destination categories that have been driving growth throughout 2020. The sales penetration of Owned Brands is expected to grow from approximately 10% to approximately 30% within the first three years, and drive improvement in gross margin as a result of the Company's ability to strategically design to cost, source at scale and provide great everyday value.
Mark Tritton, President & CEO, said, "In the next six months, we will deliver the most significant transformation of our product assortment in a generation, by providing our customers with inspirational Owned Brands across every room in their homes. Available only at Bed Bath & Beyond, our new range of Owned Brands will infuse purposeful innovation and affordable quality to drive gross margin and category dominance. Combined with our continued investment in the key national brands consumers know and love, this will create a platform for sustainable long-term growth and true authority in the Home market, while helping customers realize the potential to create a happier home in each and every room.
"In 2020, we rebuilt and stabilized the foundations of our business while creating growth. As we enter our Company's 50th year, we look forward to welcoming our customers to the new Bed Bath & Beyond, with a truly customer-inspired assortment, reimagined stores, an enhanced omni-always, digital-first shopping experience, and exceptional value across every price point."
Accelerating the Comprehensive Growth Strategy The Company plans to introduce at least 10 Owned Brands in the next two years, including launching a new Owned Brand assortment every month in the first half of the 2021 fiscal year. The plans are part of a comprehensive, data-driven growth strategy that includes resetting the merchandising assortment by categories and rooms, remodeling approximately 450 stores, enhancing the digital-first, omni-always shopping experience and introducing a modern, 360-degree approach to marketing and customer engagement. As part of the accelerated transformation program, the Company is also removing thousands of under-performing labels, brands and products across the core destination categories which account for the majority of its assortment.
The transformational Owned Brands program will start later this month with the launch of Nestwell™, a highly relevant assortment of quality bed and bath goods that will build authority in the growing sleep category. The Company also plans to relaunch its Haven™ bath brand in April, providing a spa-inspired assortment of organic cotton products and more, to help customers create their own bath sanctuary. In addition, the Company will also launch Simply Essential.™, a new Owned Brand assortment at opening price point, that will include more than 1,000 hard-working household essentials and highly functional, well-designed products at great value across multiple destination categories and rooms.
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