TGT Stock – Bed Bath & Beyond’s New Private Label Brand Is Its Latest Turnaround Move
Bed Bath & Beyond is launching a new private label brand Monday as part of the company’s ongoing transformation. The home goods retailer seeks to win new customers and encourage repeat orders from shoppers who turned to the store during the pandemic.
On Monday, Bed Bath & Beyond (ticker: BYND) introduced Simply Essentials—a value-focused brand with 1,200 products across the home space, from $5 pillows to $2 measuring spoons. It’s the third company-owned brand that the retailer has rolled out in as many months, fulfilling part of the strategy it laid out at its October investor day.
Bed Bath is ultimately targeting 30% of sales to come from its house brands.
In March, Chief Executive Officer
discussed with Barron’s the company’s plans for multiple owned brands as part of its turnaround, calling them the latest on the “stepladder of change.” Chief Merchandising Officer
spoke with us ahead of the launch of Simply Essentials, which he calls a “high quality, solutions-oriented line of basics that are easy for multiple customers to afford.”
While major national brands will still be the bread and butter of Bed Bath’s business, the company’s latest move dovetails with Tritton’s playbook: He successfully spearheaded private labels at retailers like
Although the pandemic saw many consumers flock to trusted companies, private labels have been on the rise for years. These brands are seen as a way to differentiate from other retailers and create exclusive product lines—ones that can’t be easily found on third-party online marketplaces.
Private labels are a break with Bed Bath’s previous strategy. Tritton and Hartsig are part of a relatively new management team that has been tasked with the company’s turnaround. Optimism about the company’s transformation, along with pandemic-fueled home product sales, has helped the stock rise nearly 300% in the past year.
Hartsig says that, previously, Bed Bath wasn’t doing effective category or competitor reviews, or harnessing much in terms of data analytics to understand consumers’ changing needs. By implementing these tools, the company identified a need for a broad assortment of value-oriented merchandise that would appeal to a younger cohort of new consumers—which was underrepresented among their shoppers.
“Clearly we want to satisfy existing customers and gain new ones as a way for us to rebuild market share,” he added.
The company has received positive feedback from employees and customers about its previously launched house brands—Nestwell and Haven, Hartsig says. More private label brands are due to come online before the key back-to-college season. The process has allowed the company to be more proficient in overseeing product development from the idea stage to hitting store shelves, while using a mix of physical and digital assets to reach consumers.
Hartsig also hopes that the new product lines will help Bed Bath capitalize on what is likely to be another robust year for home goods sales. “People continue to invest in their homes because we now have a heightened emotional connection to our home,” he says. “We don’t think this is a one-hit wonder, but a multiyear pattern.”
While an economic reopening will mean that shopping has to contend with the return of other discretionary categories, so far that hasn’t dented profits in the category. Bed Bath reported upbeat earnings last month, as did Wayfair (W) last week, and analysts are optimistic about home improvement retailers’ coming results as well.
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