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Bed Bath and Beyond is a Cautionary Dumpster Fire

Updated: Sep 19, 2023

The big box megastore that once dominated the home goods industry has filed for bankruptcy and is shutting its doors. What can your business learn from the rise and fall of a category-killer company?

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You may have a stockpile of them somewhere. They’ve no doubt found their way into your mailbox at some point. Those blue and white 20% off coupons from Bed Bath and Beyond that were once one of the most innovative marketing strategies of its era are now little more than remnants of the store's epic implosion and flailing demise. The store, which declared bankruptcy in late April, no longer accepts them. Businesses looking to capitalize off BB&B’s downfall use coupons as lures to pull away the company’s former customers.

If you have a stack of those ill-fated mailers, it’s not a complete loss. You can use them at JoAnn Fabric, Boscov’s, and the Container Store. Big Lots advertised that they were accepting them until May 7, but it might be worth checking in with your local retailer to see if they have extended the opportunity. However, they will do you no good at BB&B if the one near you is still open.

So how did this category killing mega store go from one of the most innovative leaders in the business industry to a cautionary tale for small and large businesses worldwide? That story begins in New Jersey.

How It Started.

Bed Bath and Beyond first emerged in Springfield, New Jersey, in 1971 as Bed n’ Bath. Their founders, Warren Eisenberg, and Leonard Feinstein, were both managers in the discount retail industry. They saw the market shifting towards specialty stores and decided to capitalize on the moment. By 1985, their bed and linen store had expanded across the northeast and into California.

With 17 stores under its belt, Bed n’ Bath changed its name to Bed Bath & Beyond, expanded its range of products, and opened its first megastore. By 1992, the company went public, and by 1999, they were earning over $1 billion annually. At their peak in 2017, they would boast over 1500 stores in North America.

What Happened?

Bed Bath and Beyond did everything right until they did everything wrong.

The big box giant reached their peak in 2017 with $12.44 billion in net sales. In 2018, net sales took their first dip in the company’s history, falling to $11.36 billion. Bed Bath and Beyond lost nearly $1.5 billion more the following year, and the pandemic hit.

The problem? BB&B didn’t have a robust enough e-commerce infrastructure put in place to compete with the acceleration of online retailers like Amazon and Walmart under normal circumstances. In the almost fully internet-based market that emerged during the pandemic, their online marketplace weaknesses crushed them.

As Barbara Kahn, a professor of marketing at the Wharton School, explains in a recent article,

“Walmart and Target were much faster to recognize the importance of e-commerce, and both retailers invested in omnichannel strategies that built on their store advantages and capitalized on the convenience of e-commerce shopping.”

And as the co-founder of Bed Bath and Beyond, Warren Eisenberg, admitted during a recent Wall Street Journal interview, “We missed the boat on the internet.”

How It's Going.

Eisenberg once explained that he chose to send those blue and white coupons directly to customers instead of spending on advertising because he thought customers would rather get a discount on the item they want instead of the items they chose to put on sale. It was cheaper, customers liked it, and it worked. Until it didn’t.

BB&B rapidly lost market shares to Amazon, Wayfair, Target, and Costco. By February of this year, they were forced to shut down all operations in Canada and declared bankruptcy in the US in April. Days later, they stopped accepting their own coupons, and earlier this month, they were delisted from NASDAQ. While businesses like JoAnne Fabrics and Big Lots are capitalizing off of their coupons, the Container Store and Five Below are scooping up the real estate being abandoned by the former megastore. BB&B is no longer honoring gift cards and no longer maintaining baby and bridal registries. There is very little hope that an investor will swoop in to save the day. The company is all but doomed.

As BB&B draws its last breaths, its greatest value can now be found in the example it set for other businesses facing changes in the market and wondering how to navigate them. They are a cautionary tale and a dumpster fire, but much is to be learned from their rise and demise.

Are you wondering if your business is prepared for the latest shifts in the market? Contact us today for a free consultation.


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GS Potter is a researcher, analyst, and strategist with over 20 years of experience supporting grassroots and grasstops organizations, media outlets, and strategy firms. Her specialty is producing content and analysis for BIPOC communities and those supporting them.

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