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Amy Sullivan, CEO of Bed Bath & Beyond, joins us to discuss the brand’s comeback, its Container Store partnership and the future of home shopping.
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00:00After years of those iconic blue coupons, its own set of retail drama and bankruptcy headlines, Bed Bath & Beyond
00:07is staging a comeback.
00:08And this time, it's teaming up with the Container Store to reimagine what home shopping looks like.
00:14So to break all of this down for us now, we are joined by the president of Bed Bath &
00:18Beyond, Amy Sullivan.
00:19Thank you so much for being here, Amy.
00:21Thank you, Justine. So nice to be here.
00:24Of course, we have a lot to get to. But first, talk to us about Bed Bath & Beyond.
00:28It was one of these iconic kind of weekend ritual places to go for millions of Americans.
00:33What does it mean to bring this brand back into physical stores again?
00:37Yeah, I think, you know, first of all, from a personal level, it's just kind of one of those one
00:42in a lifetime, once in a lifetime opportunities.
00:44And we've had a little bit of experience already of opening a couple of small format stores here in Nashville.
00:49And it was a great validation point that the brand is still beloved.
00:53It's certainly, as you mentioned early on, been through sort of some turmoil over its lifetime under different team, different
01:00leadership.
01:00But we had customers lining up outside the front door at the first grand opening and again in Fort Worth
01:05at the Container Store location as well.
01:07And so it's a brand that everyone knows and that means something to everyone at some moment in their life.
01:13Yeah, it really is. And it is exciting to see it come back. I've been there so many times as
01:17well.
01:18I got all those coupons as well. And so it really is exciting to see it come back.
01:21And also now in kind of a new, different way. You just had this massive deal with the Container Store.
01:26It caught a lot of people by surprise, really. So tell us a little bit about why this partnership makes
01:31so much sense for both brands.
01:32Sure. Yeah. I mean, as you think about both brands, first of all, they both carry great equity with the
01:37consumer.
01:38And when you think about the product offering of those two, they actually complement each other really well and are
01:43not in conflict or sort of direct competition with one another.
01:46And so as we think about our goal to be this everything home business that even spans outside of retail
01:52at a future date, we saw these two opportunities as two great brands.
01:57Container Store has amazing real estate, a great footprint. And it also has the other half of how you think
02:02about the functional side of your home.
02:04And so, as I mentioned, we launched the first co-branded store in Fort Worth, Texas, and saw a really
02:11amazing response from the customer.
02:13We've had organizers there. We've had influencers there. We've had customers there.
02:17And it really is kind of a marriage of two great things.
02:20And obviously, as we open that first store, we have learnings of like other categories we would grow and things
02:26that would shrink.
02:26But it really is a combination that we feel like begins to create this destination for your entire home.
02:34Yeah, it really does seem like the brands are very complementary to each other.
02:37And it seems like you are having success now with this new store.
02:40Tell us a little bit about how that will feel.
02:42So, this Container Store and Bed Bath & Beyond location together, how will that feel kind of different from the
02:47old Bed Bath & Beyond experience that customers might be familiar with?
02:51Yeah, I think for us, I mean, if you think about those two brands together, Bed Bath & Beyond is
02:56certainly the hero brand that every single consumer in America knows.
03:01And so, we want it to feel very familiar.
03:03The blue coupon is there in a big way.
03:05Both, we will give you one when you walk in the door, and there's one hanging from the ceiling, they're
03:09in the windows, they're everywhere.
03:10And so, that sort of iconic moment of Bed Bath & Beyond is ever present.
03:15When you think about the actual store experience, though, we want to take you on the journey of every room
03:20of your home.
03:20And so, when you get to the kitchen area, for example, you'll find everything from food storage to pantry storage
03:27to bakeware, cookware, gadgets, all of those things.
03:30And so, we really are trying to make it a seamless merge of the two so that the customer feels
03:36like, okay, this is for my kitchen, this is for my bedroom, this is for my bathroom.
03:39And so, I wouldn't think of it as Container Store is over here and Bed Bath & Beyond is over
03:44here.
03:44It's really a marriage of the two complementary assortments.
03:49Yeah, that's a really interesting integration there and does really make a lot of sense.
03:53How do you kind of modernize the brand without losing that nostalgia?
03:57Again, you talked about the coupons and all of that that people love.
04:00How do you really modernize it and bring it into this moment right now?
04:03I think a couple of things.
04:05So, the store experience really matters.
04:06And if you look back over sort of the past, you know, five, six, seven, eight years of retail, omni
04:13-channel is important.
04:14And we once went on this boom that e-com is going to crush brick and mortar, but they really
04:19need to coexist.
04:20And so, that brand needs to come to life in both a physical and a digital experience.
04:24And so, as we think about modernizing the store format, the stores that we all remember from Bed Bath &
04:30Beyond, they were really large and probably overwhelming and had too much inventory.
04:34And so, these are about half the size of what a legacy Bed Bath & Beyond would have been.
04:38And we've done a lot of the hard work for you, and we feel like we have merchants in place
04:42who are curating the best of the best assortment, so it's easier to shop.
04:46And then there's two things that make it unique this go-around.
04:49First of all, part of the acquisitions of all of these brands that we're piecing together, one was Kirkland's, which
04:54was a 340-store chain of a home decor business.
04:57And that is one area that Bed Bath & Beyond didn't do really well, Container Store has really never done.
05:03And so, as you walk into the front of the store, we want to offer you great home decor at
05:08a great value.
05:09And so, that new introduction of more of the how you outfit your home, how you decorate your home is
05:15new to the experience.
05:16And then the other part of it that I would say is unique is the home services business, where we
05:21all know Alpha and how we can customize your closet, how we can customize your pantry.
05:26That is something now unique to Container Store that will be part of Bed Bath & Beyond.
05:31So, it's this sort of molding and melding of all of those experiences together that we think makes it both
05:37feel fresh and new for Bed Bath & Beyond,
05:40but also we feel like it makes it attract more customers at more frequency to come into the footprint.
05:45I mean, that definitely makes sense, thinking about these services that maybe weren't offered before and are harder to find,
05:51and really bringing those together for customers.
05:53I mean, the home goods industry right now is just incredibly competitive.
05:57What's the strategy for standing out against everyone from Target to Amazon to Ikea?
06:01Is it really kind of bringing these other services in, or is there something else?
06:05It is.
06:06I think that's the one thing that I would sort of say is the biggest differentiator for us.
06:10And as we scale, you'll hear us talk more and more about home services.
06:13And it's the one part of the business in our entire ecosystem that I'll say is somewhat internet-proof.
06:18You can't have any other sort of direct-to-consumer brand or website come to your home, measure for your
06:25closet.
06:25And I think once you cross that threshold with the customer of you've been invited into her home to do
06:30something for her,
06:31that brand trust just continues to grow and grow.
06:34And so that home services component of it, I think, is the standout.
06:38And we want that to be something where a customer in a future state could do a kitchen, can do
06:43design services.
06:45There's a lot more to come once we sort of build out this whole fleet and this whole sort of
06:51outside sales team
06:52that can really get inside the customer's home and help them bring it to life.
06:55Yeah, that's so important for customers looking at the brand and coming back
06:59and now finding something different than they saw there before in addition to what they expect as well.
07:04Talk to us a little bit about from the business side of things.
07:06There's supply chain issues.
07:08We have shipping costs.
07:09We have tariffs.
07:09There's so much going on geopolitically now around the world that's affecting all retailers.
07:14So how are you managing those challenges while still keeping products affordable for customers?
07:19Right.
07:19I mean, I think obviously that's a challenge that every retailer faces similarly.
07:24I think when we think about what we're building in this ecosystem and sort of putting brands and companies together,
07:30we're focused on buying capabilities and then stripping out excess costs where we can synergize other parts of the business.
07:37And so when I think about the Kirkland's acquisition, we bought a decor business.
07:40We bought a strong product development team.
07:43When I think about the container store, we bought the brand.
07:46We bought the Alpha brand.
07:48We bought very amazing real estate.
07:50But there are things that you can start to strip out of all of these businesses.
07:53When you synergize back office operations, you synergize HR functions and legal functions and all of those things,
08:00it really gets to a point where the revenue growth power of each of these brands now has a shared
08:06expense structure off of what was once a bunch of independent partners.
08:10So you can think about it as economies of scale or synergies,
08:14but that's really just bringing great brands together and really just protecting their capabilities and spreading that expense across all
08:22of these brands.
08:23I mean, that reorganization, that reorganization is so important to kind of streamline all of that,
08:29again, in the face of everything else going on outside of your control, outside of the company.
08:33Tell us looking forward, what can people expect?
08:36Are we going to see more of these kind of co-branded joint stores?
08:40What can people expect as we move into the end of this year, next year?
08:43What's coming next?
08:44Yeah.
08:45I think for us, you know, a sort of renewed transformation and a rollout across our entire fleet of stores.
08:52So as you think about these acquisitions that we've made, I would think about the store count growing and all
08:57of those stores will become co-branded locations.
09:00And so we will have a great sort of similarity across our store fleet.
09:04And then at the same time, a digital transformation.
09:06Obviously, that's just as important, if not more.
09:09And so bringing the brands together allows us this sort of moment to reset and relaunch.
09:15And so I would think of it as sort of a new grand opening, but there will be massive store
09:19growth with this fleet as we change them all to some form of a Bed, Bath & Beyond, as well
09:25as that digital reinvention.
09:27Well, it's very exciting.
09:28We have a lot to look forward to.
09:30Thank you so much, Amy Sullivan, president of Bed, Bath & Beyond.
09:33We really appreciate you being here today.
09:35Good to speak with you.
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