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Corporate News Blog - Bed Bath and Beyond Speeds Up Reorganization of Store Management Structure; Eliminates 880 Store Jobs

Research Desk Line-up: Haverty Furniture Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 7, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Bed Bath & Beyond Inc. (NASDAQ: BBBY), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=BBBY. The Company announced on August 03, 2017, that it had speeded up the realignment of its store management structure. The exercise is a part of the Company's initiatives to improve and capitalize on the opportunities in the retail sector. The exercise will result in the elimination of nearly 880 store jobs. For immediate access to our complimentary reports, including today's coverage, register for free now at:


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Commenting on the reorganization of store structure, Steven H. Temares, CEO and Member of the Board of Directors of Bed Bath and Beyond said:

"As we work to continue to satisfy our customers through our omnichannel capabilities, the role of our stores is also evolving, and remains crucial to achieving our mission of being trusted by our customers as the expert for the home and heart-felt life events. The actions taken today to accelerate the realignment of our store management will allow us to better support our customer-focused initiatives as well as support our omnichannel growth, while driving operational excellence."

The Proposed Reorganization plan

The Company's new plan for the reorganization of its store structure aims to increased focus on customers and omnichannel growth. The Company, after extensive deliberations, has therefore decided to eliminate approximately 880 Department and Assistant Store Manager positions. This decision will impact nearly half of the Bed Bath & Beyond stores and around a dozen buybuy BABY stores in US.

The Company had initiated efforts to change the store management roles nearly a year back by making changes in the store hiring practices and freezing attrition. The current decision just speeds up the process. The Company has assured that there will be no additional job cuts once this process is completed. After the process in completed, the Company expects that the overall staffing levels in-store will continue to remain at the level before the start of the reorganization or may witness a slight increase.

The Company has also initiated other transformational initiatives with the aim of improving operational efficiencies across the organization and enhance profitability. To ensure that the drive for operational excellence continues, the Company has established a new Strategic Portfolio Management Office and allocated additional personnel, including industrial engineers, for the same.

Impact and Benefits of the Reorganization plan

Bed Bath and Beyond expects that these reorganization initiatives will result in yearly pre-tax cost savings of approximately $16 million including pre-tax cost savings of approximately $7 million within the current fiscal year 2017.

The reorganization initiatives will also result in expenses of approximately $17 million in the current fiscal year 2017. These costs are primarily because of the severance pay and other costs associated with the reorganization initiatives. These costs will be reflected in the Company's Q2 2017 financial results.

The Company plans to share the information regarding these initiatives as well as the resulting costs via a conference call scheduled on September 19, 2017, and at periodic intervals throughout the year. The Company also revealed that the reorganization costs were not included in the Company's full year financial guidance provided in April 2017.

The elimination of Department and Assistant Store Manager positions will result in reducing one entire tier in the management structure. As a result, the organization structure would be more simplified. The Company could easily shift its focus from management roles to non - managerial roles that have direct interactions with customers. This will help the Company meet the evolving customer service levels and expectations which would result in the rapid growth of the store profitability.

Bed Bath and Beyond has been facing a decrease in the in-store transactions in spite of increased costs of promotions and advertising. The good news is that the Company's sales through its digital presence have witnessed a strong growth (over 20% in the Q1 2017). It would be interesting to see how the current reorganization initiatives impact the Company's in-store transactions in future.

Last Close Stock Review

On Friday, August 04, 2017, the stock closed the trading session at $30.10, falling 1.44% from its previous closing price of $30.54. A total volume of 2.70 million shares have exchanged hands. Bed Bath & Beyond's stock price advanced 1.52% in the last one month. The stock is trading at a PE ratio of 6.95 and has a dividend yield of 1.99%. The stock currently has a market cap of $4.42 billion.

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