Bed Bath & Beyond is back . . . kind of.
As of Tuesday, Overstock officially swaps its name out for the now-defunct housewares chain. Customers searching for either retailer online will wind up on the same landing page, where both companies' logos will be displayed for the next few months.
Overstock - once an online repository for closeout furniture, home decor and more - acquired Bed Bath & Beyond's intellectual property for $21.5 million in June, about two months after the company filed for Chapter 11 bankruptcy. The rebranding is expected to build on both companies' strengths, said chief executive Jonathan Johnson.
"We thought we had a good operating model but a bad name; we thought Bed Bath & Beyond had a great name but a bad operating model," he said. Overstock, unlike Bed Bath & Beyond, doesn't own its inventory. Rather, third-party suppliers ship the items directly to customers.
Overstock has been testing the transition in Canada since June. Now, U.S. shoppers will experience the same. Here's what you need to know.
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Why would Overstock want to rebrand as Bed Bath & Beyond?
Bed Bath & Beyond has strong brand recognition and a fervent customer base - two things Overstock needed, said Mindy Weinstein, founder and chief executive of the digital marketing company Market MindShift.
"It's a very smart move from a marketing perspective," she said, citing in particular the savings. "They cut so many of the painful processes and time it takes to rebrand yourself."
Meanwhile, Overstock's name has "been a liability for them," said Barbara Kahn, a marketing professor at the University of Pennsylvania's Wharton School. Consumers still associate the brand with its original business of selling surplus or returned inventory, even though it moved away from that model years ago.
The same was true for suppliers, Johnson said, noting that some brands were hesitant to sell their product on the website for fear of being associated with liquidation.
Customers may also still associate Overstock with its former chief executive Patrick Byrne, who resigned in 2019 after saying he dated a Russian agent and was involved in a "deep state" investigation of the 2016 election. Soon after, he and another executive were named in an investor's lawsuit accusing Overstock of securities fraud.
The company already is seeing benefits from the rebrand, with suppliers it had been courting for years now "knocking on our door," Johnson said. More than 600,000 new products have been added to the website since the Canada rollout started, he added.
That said, there are risks to such a major rebrand, according to Kahn. The company "has to meet customer's expectations" of what they would expect to find at Bed Bath & Beyond, she said.
And the company has a lot of ground to make up. Second-quarter earnings released last week showed active customers dropped nearly 30 percent year-over-year and revenue declined 20 percent.
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Remind me - what happened to Bed Bath & Beyond?
During its heyday, Bed Bath & Beyond was the go-to destination for housewares, small appliances, wedding registries and college dorm supplies. But the company had been steadily losing relevancy for more than a decade, as rivals such as Walmart, Target and Amazon doubled down on homewares. (Amazon founder Jeff Bezos owns The Washington Post. Interim CEO Patty Stonesifer sits on Amazon's board.)
In recent years, corporate missteps and bad investments started the company down a road of patchy inventory and dwindling customer interest. Its former chief executive Mark Tritton, who took over in 2019, made bold steps to revamp the company's private-label home brand, shifting away from popular lines to promote Bed Bath & Beyond's private label offerings. The endeavor went nowhere, deterring customers and tarnishing relationships with suppliers.
And while Bed Bath & Beyond benefited from a boost during the coronavirus pandemic, the company failed to capitalize on the wave of consumer spending. When the economic climate shifted and stubbornly high inflation reduced discretionary purchases, the retailer fared worse than its competitors.
By the latter half of 2022, many vendors decided it was too risky to give the company merchandise on credit, compounding its inventory problems. So with fewer items on shelves, many customers stopped visiting stores.
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Can I buy the same things I could get at the original Bed Bath & Beyond?
For the most part, yes.
Though Overstock's inventory - mainly furniture - falls more under the "beyond" umbrella, Johnson said the company has expanded its offerings in the bed and bath categories. A legacy Overstock customer will notice more small appliances, such as toasters and stand mixers, and bedding options, he added.
But there are some products that won't be available on the website. Since Bed Bath & Beyond shuttered all its brick-and-mortar stores and Overstock is solely online, Johnson said that it's doing away with single, low-cost items that "probably [don't] make sense for us to ship," such as Tide Pods, K-Cups and one-off orders like a $3 spatula. Instead, customers will be able to buy a set of spatulas.
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Will there still be coupons?
Yes and no. While Bed Bath & Beyond's classic 20-percent-off coupon no longer exists, Overstock is still offering promotions.
To kick off the rebrand, customers who sign up for the loyalty program will receive a 20-percent-off coupon. Those who download the new app will be able to redeem a 25-percent-off discount.
The company is also reinstating as much as $50 worth of each Bed Bath & Beyond customer's unused Welcome Reward points, which were erased as part of its bankruptcy proceedings, as well as a free year-long membership worth $19.95, Johnson added.
"We want those customers feeling comfortable coming back and encourage them to come back," Johnson said.
But don't expect to receive coupons in your inbox or the mail. Johnson contends that Overstock offers lower prices than Bed Bath & Beyond did.
"While we'll start out with some big promotions and we'll always continue to do promotions and couponing, I think the Bed Bath customer will see better, sharper prices, even pre-coupon, and certainly after adding coupons," he said.