Bed Bath & Beyond (BBBY) Plans to Roll Out Owned Brands
Leading retailer of home furnishing products and other domestic merchandise — Bed Bath & Beyond Inc. BBBY — is in an assortment expansion spree. As part of its three-year transformation plan, the company will launch at least eight new Owned Brands in fiscal 2021. Another major step in its comprehensive growth strategy includes plans to launch thousand of new products, exclusively available only at Bed Bath & Beyond. These actions are expected to boost the company’s footing in the $180 billion Home market. Let’s dive deeper.
Boosting Brand Strength is a Prudent Move
Management highlighted that its latest move to expand Owned Brands assortment is one of its major product-based initiative undertaken in a generation. Out of the eight new Owned Brands planned to be launched in fiscal 2021, six brands will be launched in each of the first six months of the fiscal year. Moreover, the company plans to introduce at least 10 Owned Brands in the next two years.
Management expects its transformational Owned Brands program to begin later this month, with the launch of Nestwell — an assortment of quality bed and bath goods. The Nestwell brand is likely to boost the company’s presence in the sleep category. The company also plans to relaunch the Haven bath brand in April, which will offer a spa-inspired assortment of organic cotton products and more. Further, the company plans to introduce Simply Essential — an Owned Brand assortment that will include more than 1,000 household essentials. These highly functional, well-designed products will be offered at a great value across multiple categories.
The company highlighted that the new Owned Brands will cater to consumer needs across segments such as bed, bath, kitchen and dining, storage and organization as well as home decor. In fact, these products will form part of the company’s key category that contribute more than 60% to its revenues. Moreover, management expects the sales penetration of Owned Brands to grow from 10% to nearly 30% within the first three years. Further, the company expects to boost gross margin by strategically managing costs and sourcing.
Clearly, Bed Bath & Beyond is focused on boosting consumers’ shopping experience by offering a wide range of home related merchandise needed for comfortable and enjoyable living. Its latest initiative to offer a range of Owned Brands is likely to transform its assortment and also create substantial opportunities for long-term growth. Moreover, as the company enters its 50th year, management looks forward to welcoming customers with new collections in reimagined stores. Such upsides along with the company’s focus on expanding digital capacity, omni-channel offerings and well-chalked marketing strategies are likely to keep the company in good shape in the forthcoming periods.
Markedly, this Zacks Rank #3 (Hold) stock has gained 47.4% in the past three months compared with the industry’s 8% growth.
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