During a call with analysts on Wednesday discussing fourth quarter results, Bed Bath & Beyond CEO Mark Tritton announced the home goods brand sold off its One Kings Lane banner to an unnamed third party.
Bed Bath & Beyond, which acquired the home decor site in 2016, did not disclose how much it sold the banner for.
- Tritton on the call also said that a deal to sell off its PersonalizationMall.com unit to 1-800-Flowers for $252 million had not closed on March 30 as planned. The company earlier this month filed a lawsuit against 1-800-Flowers in regards to the deal.
Like many retailers, Bed Bath & Beyond closed the majority of its 1,500 stores with no plans to reopen until at least May 2 in order to help stem the spread of the coronavirus.
To reduce its cash burn rate the company has taken action during this time: The majority of store associates and some corporate associates have been furloughed until at least May 2; Tritton and other executives have taken salary cuts; Bed Bath & Beyond negotiated with vendors and landlords, and has postponed non-critical capital expenditures. CEO Mark Tritton also said its buying team has started canceling purchase orders to help mitigate store inventory pileup.
"That action, combined with a good balance sheet including $1.4b in cash and no restrictive financial covenants on near-term maturities on its debt, position the company to be able to weather a prolonged store closure period and a slow return to positive sales growth even after stores reopen," Wedbush analyst Seth Basham said in an emailed client note.
However, even before COVID-19 made significant impacts to U.S. business, Bed Bath & Beyond in February had warned investors of a disappointing quarter to come. When it released preliminary results, it said December and January comparable sales fell some 5.4% as it faced steep declines in store traffic and inventory management problems.
The retailer reported on Wednesday that full fourth quarter net sales fell 6.1%, while comp sales fell 5.6%. Comp sales from stores fell 10%, but from its digital channels, they rose 16%. Bed Bath & Beyond's net loss narrowed in the fourth quarter to $65 million. For the full year, net sales decreased 7.2% to $11 billion, while comps fell 6.8%. Net loss swelled to $614 million from $137 million a year ago.
"In short, the pressures of store traffic trends and heavy promotional activity coupled with inventory management issues around the holiday selling period hampered our efforts to stabilize the business in the fourth quarter," Tritton said adding that key products, such as those in the kitchen electronics area, weren't available. "We just didn't have enough of the right stuff, we should have."
Some of the company's banners that are deemed essential remain open. The retailer launched curbside pickup at BuyBuy Baby at the beginning of the month, in which it fulfilled more than 11,000 orders in the first week, and later this week it will roll out buy online, pick up in-store (BOPIS) services at the banner. Additionally, curbside pickup will be introduced at Harmon stores in the coming days. Once Bed Bath & Beyond stores can reopen, curbside pickup and BOPIS will be introduced there as well.
"While the loss of store sales is producing total company comps at a -60% run rate, we look favorably on the company's ability to drive its online business, which we see as critical to its long-term success as an omnichannel retailer," Basham said.