Bed, Bath & Beyond Inc. Throws in the Towel—Key Business Risk Weaknesses To Watch For In Other Retailers

In this commentary we discuss the business risk weaknesses that led to Bed, Bath & Beyond Inc.’s (BB&B; not rated by DBRS Morningstar) downfall and how these weaknesses can be indicators for which retailers are at increased risk of experiencing a similar fate.

Key Business Risk Weaknesses To Watch:
(1) Lack of omnichannel capabilities;
(2) Unmitigated category concentration;
(3) Lack of long-term customer loyalty; and
(4) Lack of continuous reinvesting in the business.

“BB&B’s demise was primarily driven by the Company’s weak operating performance, including poor merchandising initiatives and supply chain management, exacerbated by the decision to prioritize share buybacks over transformative investments and a relatively large debt burden. All this occurred against the backdrop of a challenging macroeconomic landscape and intensely competitive operating environment,” said Moritz Steinbauer, Vice President, Team Lead Diversified Industries.