Bed Bath & Beyond Inc. (NASDAQ: BBBY) was formed in 1971 and today operates a chain of domestic merchandise retail stores across United States, Puerto Rico and Canada [1]. They feature mostly medium-ranged, but also a limited selection of high quality, domestic merchandise: items for the bedroom, bathroom, kitchen, and dining room. The company is included in the S&P 500 and Global 1200 Indices and the NASDAQ-100 Index. It is also counted among the Fortune 500 and the Forbes 2000.
The company's corporate headquarters are located at 650 Liberty Avenue, Union, New Jersey 07083.
Bed Bath & Beyond Inc., along with its subsidiaries, is a chain of retail stores, operating under the names Bed Bath & Beyond (BBB), Christmas Tree Shops (CTS), Harmon and Harmon Face Values (Harmon) and buybuy BABY. In addition, the Company is a partner in a joint venture, which operates two stores in the Mexico City market under the name Home & More. The Company sells an assortment of domestics merchandise and home furnishings, which include food, giftware, health and beauty care items, and infant and toddler merchandise. As of February 27, 2010, Bed Bath & Beyond Inc. operated 1,100 stores located in 49 states, the District of Columbia, Puerto Rico and Canada, including 965 BBB stores operating in 49 states, the District of Columbia, Puerto Rico and Canada; 61 CTS stores operating in 15 states; 45 Harmon stores operating in three states, and 29 buybuy BABY stores operating in 14 states.
The Company’s domestics merchandise includes categories, such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories, such as kitchen and tabletop items, tabletop, basic housewares and general home furnishings. Most of the Company’s stores are open seven days and six evenings a week. In addition, the Company’s Websites, www.bedbathandbeyond.com, www.christmastreeshops.com, www.harmondiscount.com, www.facevalues.com and www.buybuybaby.com are available for customers to access round the clock.
Most of the Company’s stores are located in suburban areas of medium and large-sized cities. These stores are situated in strip and power strip shopping centers, as well as in off-price and conventional malls, and in free-standing buildings. Stores range in size from approximately 5,000 to 100,000 square feet, but are predominantly between 20,000 and 50,000 square feet. Approximately 85% to 90% of store space is used for selling areas, and the balance for warehouse, receiving and office space. Total square footage totaled approximately 33.7 million square feet as of February 27, 2010.
During the fiscal year ended February 27, 2010 (fiscal 2009), the Company opened a total of 67 new stores, including 39 BBB stores throughout the United States and Canada, nine CTS stores, five Harmon stores and 14 buybuy BABY stores, and closed four BBB stores, all of which resulted in the aggregate addition of approximately 1.7 million square feet of store space. During fiscal 2009, the Company purchased its merchandise from approximately 5,200 suppliers. The Company purchases substantially all of its merchandise in the United States, the majority from domestic sources and the balance from importers. It purchases a small amount of its merchandise directly from overseas sources.
These management strategies provided Bed Bath & Beyond with one of the retail trade's strongest return on sales during the early 1990s. Out of every $100 in sales, Bed Bath & Beyond retained $7.36. The company's growth soared in the early 1990s, fueled by its ability to tap into hot marketing trends. Between 1989 and 1993 Bed Bath & Beyond increased its number of stores from 24 to 38 in 11 states.
Bed Bath & Beyond went public on the NASDAQ exchange in June 1992, trading at $17 per share. The company immediately became a Wall Street favorite, fueled by a rush of media coverage and the successful launch of a new Manhattan store. Analysts noted that, given the popularity of the merchandising concept that the company was championing, the timing to go public was ideal. By May 1993, shares were trading around $32 as the company announced record sales for the year: $216.7 million in sales, with earnings of $15.9 million.
As proof of Bed Bath & Beyond's status as a trendsetter, one need only examine the success of its Manhattan store. The store opened in November 1992 in what had been an abandoned, graffiti-covered department store at the heart of a dismal section of the city known as Ladies Mile. At the beginning of the twentieth century, Ladies Mile had been a booming retail center, revered as the place where upscale, fashionable ladies bought their clothing. By 1990, despite its desirable location in the center of Manhattan, the district was a mess. When Bed Bath & Beyond opened, however, it kindled a renaissance of the neighborhood. Within a year, a number of other superstores, including Barnes & Noble books, Today's Man menswear, and Staples, a discount office-supply chain, had also renovated boarded-up old emporiums. Bed Bath & Beyond added 30,000 more square feet to the store and it became the company's flagship store, a site where new merchandising concepts (such as a cafe and the introduction of gourmet food products) are given trial runs.
While Bed Bath & Beyond enjoyed tremendous success during this period in the home furnishings business, competitors sought to erode the company's standing. In the early 1990s, its primary rival, Linens 'n Things, began blatantly imitating its merchandising format. Supported by Melville Corp., a large conglomerate whose financial resources far outstrip Bed Bath & Beyond's, Linens 'n Things operated a chain of 144 stores by 1993 with annual sales around $290 million.
Linens 'n Things, which had utilized an integrated computer system since the late 1980s, enjoyed a tremendous advantage over Bed Bath & Beyond in the inventory management area. In 1993, however, Bed Bath & Beyond installed integrated computer systems in all stores that allowed managers to track inventory, sales, and receivables more efficiently. The new automated system also enabled the company to develop a chain-wide bridal registry that analysts estimated would add another 15 percent to annual sales.
Luxury Linens and Pacific Linens also posed a threat to Bed Bath & Beyond's attempts to venture into new markets. Still, the company enjoyed a 37 percent increase in sales in 1992 as it continued to grow without benefit of acquisitions. Most competitors, on the other hand, relied on expansion through acquisitions to a much greater degree. Sales in the first six months of 1993 increased 43 percent and earnings improved by 47 percent, garnering Bed Bath & Beyond first place recognition in Chain Store Executive's survey of high performance retailers.
In 1994 the company began offering such small electric appliances as coffee makers, hair dryers, toaster ovens, and vacuum cleaners. Other home accessories like gourmet foods, clocks, and lamps were added to the product line as well. This further broadened its customer base and fortified the chain's edge in the retail market.
Entering the mid-1990s, Bed Bath & Beyond notes that none of its competition offers the diversity of products it sells. Moreover, no competitors have been able to achieve the profit margins registered by Bed Bath & Beyond. By 1997 Bed Bath & Beyond hopes to have approximately 100 stores across the United States, and Feinstein predicts that company sales will rise by 30 to 35 percent by that time.
The proliferating number of imitators, however, has created what Barron's called "a treacherous environment requiring astute management." Analysts fear that the market will be saturated by the year 2000 and that perhaps Bed Bath & Beyond's impressive earnings have already peaked. They note that by 1994, Feinstein, Eisenberg, and members of their respective families had sold almost five million shares. Nevertheless, Feinstein and Eisenberg remain the driving force behind this company, and together they control over 40 percent of company shares. In addition, the two signed an employment agreement that guarantees their continued management of the company until mid-1997.
OVERALL
Beta: 1.22
Market Cap (Mil.): $14,036.05
Shares Outstanding (Mil.): 250.06
Annual Dividend: --
Yield (%): --
FINANCIALS
BBBY.O Industry Sector
P/E (TTM): 18.23 15.98 8.93
EPS (TTM): 33.80 -- --
ROI: 19.01 15.81 0.90
ROE: 20.87 17.79 1.56
Statistics:
Public Company
Incorporated: 1971 as Bed 'n Bath Inc.
Employees: 3,200
Sales: $305.8 million
Stock Exchanges: NASDAQ
SICs: 5719 Miscellaneous Homefurnishings Store
Name Age Since Current Position
Eisenberg, Warren 80 2003 Co-Chairman of the Board
Feinstein, Leonard 74 2003 Co-Chairman of the Board
Temares, Steven 52 2006 Chief Executive Officer, Director
Stark, Arthur 56 2006 President, Chief Merchandising Officer
Castagna, Eugene 45 2006 Chief Financial Officer, Treasurer
Fiorilli, Matthew 54 1999 Senior Vice President - Stores
Eppler, Klaus 80 2002 Outside Lead Director
Morrison, Victoria 57 2001 Director
Adler, Dean 53 2001 Director
Barshay, Stanley 70 2003 Director
Heller, Jordan 49 2003 Director
Gaston, Patrick 52 2007 Director
Address:
715 Morris Avenue
Springfield, New Jersey 07081
U.S.A.
The company's corporate headquarters are located at 650 Liberty Avenue, Union, New Jersey 07083.
Bed Bath & Beyond Inc., along with its subsidiaries, is a chain of retail stores, operating under the names Bed Bath & Beyond (BBB), Christmas Tree Shops (CTS), Harmon and Harmon Face Values (Harmon) and buybuy BABY. In addition, the Company is a partner in a joint venture, which operates two stores in the Mexico City market under the name Home & More. The Company sells an assortment of domestics merchandise and home furnishings, which include food, giftware, health and beauty care items, and infant and toddler merchandise. As of February 27, 2010, Bed Bath & Beyond Inc. operated 1,100 stores located in 49 states, the District of Columbia, Puerto Rico and Canada, including 965 BBB stores operating in 49 states, the District of Columbia, Puerto Rico and Canada; 61 CTS stores operating in 15 states; 45 Harmon stores operating in three states, and 29 buybuy BABY stores operating in 14 states.
The Company’s domestics merchandise includes categories, such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories, such as kitchen and tabletop items, tabletop, basic housewares and general home furnishings. Most of the Company’s stores are open seven days and six evenings a week. In addition, the Company’s Websites, www.bedbathandbeyond.com, www.christmastreeshops.com, www.harmondiscount.com, www.facevalues.com and www.buybuybaby.com are available for customers to access round the clock.
Most of the Company’s stores are located in suburban areas of medium and large-sized cities. These stores are situated in strip and power strip shopping centers, as well as in off-price and conventional malls, and in free-standing buildings. Stores range in size from approximately 5,000 to 100,000 square feet, but are predominantly between 20,000 and 50,000 square feet. Approximately 85% to 90% of store space is used for selling areas, and the balance for warehouse, receiving and office space. Total square footage totaled approximately 33.7 million square feet as of February 27, 2010.
During the fiscal year ended February 27, 2010 (fiscal 2009), the Company opened a total of 67 new stores, including 39 BBB stores throughout the United States and Canada, nine CTS stores, five Harmon stores and 14 buybuy BABY stores, and closed four BBB stores, all of which resulted in the aggregate addition of approximately 1.7 million square feet of store space. During fiscal 2009, the Company purchased its merchandise from approximately 5,200 suppliers. The Company purchases substantially all of its merchandise in the United States, the majority from domestic sources and the balance from importers. It purchases a small amount of its merchandise directly from overseas sources.
These management strategies provided Bed Bath & Beyond with one of the retail trade's strongest return on sales during the early 1990s. Out of every $100 in sales, Bed Bath & Beyond retained $7.36. The company's growth soared in the early 1990s, fueled by its ability to tap into hot marketing trends. Between 1989 and 1993 Bed Bath & Beyond increased its number of stores from 24 to 38 in 11 states.
Bed Bath & Beyond went public on the NASDAQ exchange in June 1992, trading at $17 per share. The company immediately became a Wall Street favorite, fueled by a rush of media coverage and the successful launch of a new Manhattan store. Analysts noted that, given the popularity of the merchandising concept that the company was championing, the timing to go public was ideal. By May 1993, shares were trading around $32 as the company announced record sales for the year: $216.7 million in sales, with earnings of $15.9 million.
As proof of Bed Bath & Beyond's status as a trendsetter, one need only examine the success of its Manhattan store. The store opened in November 1992 in what had been an abandoned, graffiti-covered department store at the heart of a dismal section of the city known as Ladies Mile. At the beginning of the twentieth century, Ladies Mile had been a booming retail center, revered as the place where upscale, fashionable ladies bought their clothing. By 1990, despite its desirable location in the center of Manhattan, the district was a mess. When Bed Bath & Beyond opened, however, it kindled a renaissance of the neighborhood. Within a year, a number of other superstores, including Barnes & Noble books, Today's Man menswear, and Staples, a discount office-supply chain, had also renovated boarded-up old emporiums. Bed Bath & Beyond added 30,000 more square feet to the store and it became the company's flagship store, a site where new merchandising concepts (such as a cafe and the introduction of gourmet food products) are given trial runs.
While Bed Bath & Beyond enjoyed tremendous success during this period in the home furnishings business, competitors sought to erode the company's standing. In the early 1990s, its primary rival, Linens 'n Things, began blatantly imitating its merchandising format. Supported by Melville Corp., a large conglomerate whose financial resources far outstrip Bed Bath & Beyond's, Linens 'n Things operated a chain of 144 stores by 1993 with annual sales around $290 million.
Linens 'n Things, which had utilized an integrated computer system since the late 1980s, enjoyed a tremendous advantage over Bed Bath & Beyond in the inventory management area. In 1993, however, Bed Bath & Beyond installed integrated computer systems in all stores that allowed managers to track inventory, sales, and receivables more efficiently. The new automated system also enabled the company to develop a chain-wide bridal registry that analysts estimated would add another 15 percent to annual sales.
Luxury Linens and Pacific Linens also posed a threat to Bed Bath & Beyond's attempts to venture into new markets. Still, the company enjoyed a 37 percent increase in sales in 1992 as it continued to grow without benefit of acquisitions. Most competitors, on the other hand, relied on expansion through acquisitions to a much greater degree. Sales in the first six months of 1993 increased 43 percent and earnings improved by 47 percent, garnering Bed Bath & Beyond first place recognition in Chain Store Executive's survey of high performance retailers.
In 1994 the company began offering such small electric appliances as coffee makers, hair dryers, toaster ovens, and vacuum cleaners. Other home accessories like gourmet foods, clocks, and lamps were added to the product line as well. This further broadened its customer base and fortified the chain's edge in the retail market.
Entering the mid-1990s, Bed Bath & Beyond notes that none of its competition offers the diversity of products it sells. Moreover, no competitors have been able to achieve the profit margins registered by Bed Bath & Beyond. By 1997 Bed Bath & Beyond hopes to have approximately 100 stores across the United States, and Feinstein predicts that company sales will rise by 30 to 35 percent by that time.
The proliferating number of imitators, however, has created what Barron's called "a treacherous environment requiring astute management." Analysts fear that the market will be saturated by the year 2000 and that perhaps Bed Bath & Beyond's impressive earnings have already peaked. They note that by 1994, Feinstein, Eisenberg, and members of their respective families had sold almost five million shares. Nevertheless, Feinstein and Eisenberg remain the driving force behind this company, and together they control over 40 percent of company shares. In addition, the two signed an employment agreement that guarantees their continued management of the company until mid-1997.
OVERALL
Beta: 1.22
Market Cap (Mil.): $14,036.05
Shares Outstanding (Mil.): 250.06
Annual Dividend: --
Yield (%): --
FINANCIALS
BBBY.O Industry Sector
P/E (TTM): 18.23 15.98 8.93
EPS (TTM): 33.80 -- --
ROI: 19.01 15.81 0.90
ROE: 20.87 17.79 1.56
Statistics:
Public Company
Incorporated: 1971 as Bed 'n Bath Inc.
Employees: 3,200
Sales: $305.8 million
Stock Exchanges: NASDAQ
SICs: 5719 Miscellaneous Homefurnishings Store
Name Age Since Current Position
Eisenberg, Warren 80 2003 Co-Chairman of the Board
Feinstein, Leonard 74 2003 Co-Chairman of the Board
Temares, Steven 52 2006 Chief Executive Officer, Director
Stark, Arthur 56 2006 President, Chief Merchandising Officer
Castagna, Eugene 45 2006 Chief Financial Officer, Treasurer
Fiorilli, Matthew 54 1999 Senior Vice President - Stores
Eppler, Klaus 80 2002 Outside Lead Director
Morrison, Victoria 57 2001 Director
Adler, Dean 53 2001 Director
Barshay, Stanley 70 2003 Director
Heller, Jordan 49 2003 Director
Gaston, Patrick 52 2007 Director
Address:
715 Morris Avenue
Springfield, New Jersey 07081
U.S.A.
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