If you thought all the drama surrounding the Bed Bath & Beyond brand was over when the company went out of business in 2023, you thought wrong. The hits just keep on coming.
Lemonis as non-CEO CEO looks like he will do nothing less than a total teardown of what Johnson and the previous management team had built. Hey, pre-BBB, Overstock was no prize. It was losing money and market share and seemed to have an oversized cost structure that seemingly went back to its former leader Patrick Byrne, who built the company before veering off into crypto, conspiracy theories and a serious case of Trumpism.
After the brand and assorted other intellectual properties – yes, including the ubiquitous big blue coupon architecture – were bought by what had been Overstock.com this past summer, it looked like BBB was on its way back.
Snatching it from the jaws of death, the online closeout retailer resurrected, resuscitated, and generally revived the once-dominant home furnishings brand, changing its website, marketing, and even corporate name to reflect its new moniker. In doing so, it attracted a big bad corporate wolf who didn’t like much of this rebranding and the way it was done, and arranged to have the CEO who had led the transformation shown the door in no uncertain terms. JAT Capital, the barbarians at the gate, then insisted on bringing in TV turnaround guru Marcus Lemonis (in fairness, he also runs Camping World and seems to be doing a decent job there), first as a board member, then as chairman of the board after his co-chair and company president mysteriously left in what sure looks like a suspicious coincidence. That’s when things got interesting.
While Lemonis says he doesn’t want to be the CEO of the company – it now trades under the Beyond Inc. name – you could have fooled me from an online call he did in early December with investors that was dubbed a “Fireside Chat,” but seemed more aptly named a “Fire in the Hole” rampage. We know, after watching Lemonis on his “The Profit” series on CNBC that he is used to taking charge of any given situation and doing some serious triage of damaged businesses, but his performance on this one-hour Beyond session was nothing short of overpowering.
Accompanied by two, next-level-down executives who struggled to get a word in edgewise, Lemonis outlined a ten-point plan that was heavy on operational efficiencies and short on the merchandising strategies that will be required to make this transformation actually work. A question from the moderator on when a new CEO might be brought on was brushed aside quickly with a response that it was important for Lemonis to get the company into shape rather than leave that for the new guy.
Funny, we always thought that the job of the CEO was to fix the company’s problems based on his or her experience and vision for what it should be. Whatever.
Lemonis’ plan calls for utilizing and growing the company database, cutting overhead costs, adding services like home repair and warranties through third-party tie-ins, driving visit frequency and order sizes, and “better communications” with shareholders. The latter was cited as the reason why former CEO Jonathan Johnson was sacked — a kind of nebulous charge that suggests company leaders need to be spending more time talking to Wall Street than Main Street.
Merchandising, Marcus, Merchandising?
While there were details on cost-cutting and operations, what there hasn’t been much of so far are a whole lot of specifics on the company’s merchandising. Lemonis said it needed a good/better/best assortment, which makes sense and is pretty much in the Retailing 101 handbook. He talked about adding brands and even licensing out some of the company’s own brands like its Wamsutta soft hand label…even if he didn’t quite know how to pronounce the name.
He suggested layering on an “Etsy-type” model of maker and crafted products reflecting that e-tailer’s offerings despite its recent struggles. Struggles – it might be suggested – that could signify that the Etsy model may not be all it’s cracked up to these days.
There was mention of adding baby products onto the Bed Bath site, as well.
The company did not purchase the BuyBuy Baby piece that had been part of the former BBB but Lemonis said it did get its database as part of the acquisition. OK, baby is good but compared to the overall home furnishings business it’s relatively tiny.
And we know that a return of the Overstock.com site is also in the works for a relaunch in 2024. Part of that merchandise mix will also include a return to categories like jewelry and apparel that had been sold under the Overstock name until Johnson narrowed its focus to home-only even before buying the Bed Bath business. Curiously Lemonis said “product is the foundation” of the company, yet he talked very little about how its product offerings were going to be enhanced.
The mix of home goods under Overstock was heavily weighted towards furniture and home décor and light on housewares and soft home. Some of that has been added, but compared to what Bed Bath & Beyond had historically sold, it is still a relatively meager assortment. He did some name-dropping of brands he has met with, but so far there’s not much reflection of those names on its site.
Taken as a whole, Lemonis as non-CEO CEO looks like he will do nothing less than a total teardown of what Johnson and the previous management team had built. Hey, pre-BBB, Overstock was no prize. It was losing money and market share and seemed to have an oversized cost structure that seemingly went back to its former leader Patrick Byrne, who built the company before veering off into crypto, conspiracy theories and a serious case of Trumpism.
No doubt Lemonis has a lot of things to fix, so don’t be surprised if it’s some time before a permanent CEO comes on board. This is a man who is used to running things and doesn’t seem to like a lot of people getting in his way while he’s doing it. You have to think many of the things he overhauls will help build a better company…even a much better company. The question is how long will all of this take and how much patience do investors – particularly activist ones like the private equity guys pushing for all of this – have in waiting for all of this to happen?
And if some of this sounds familiar, it should. Remember it was another group of outside investors who kicked out the existing management at the old Bed Bath & Beyond and brought in their own guy who turned everything upside down before falling flat on his face. And we all know how that ended, don’t we?