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Bed Bath & Beyond will close 150 stores and slash 20% of its workforce to cut costs

Published September 2, 2022 at 6:55 PM EDT

NEW YORK, NEW YORK - OCTOBER 01: People walk past a Bed Bath & Beyond store on October 01, 2021 in the Tribeca neighborhood in New York City. Bed Bath Beyond saw its shares drop dramatically after the company saw a drop in sales for the three months leading through August. The company attributes the losses to an increase of the coronavirus (COVID-19) cases in Florida, Texas and California, three key states for the company. (Photo by Michael M. Santiago/Getty Images)

Bed Bath & Beyond is cleaning house.

The retail giant, known for its ubiquitous coupons, announced job cuts and store closures in an effort to reduce costs as it continues to struggle with weak sales and a recent senior leadership shakeup.

In a Wednesday announcement, the New Jersey-based company vowed to slash its workforce by 20% and close about 150 stores.

According to Seth Basham, a managing director at the financial services and investment firm Wedbush Securities, Bed Bath & Beyond is seeing some of the same problems as other retailers in the home furnishings sector, such as a decline in sales and excess inventory that needs to be sold off.

But, he said, the company was also hurt by an attempt to overhaul its supply chain during the pandemic, which led to understocked store shelves, as well as a failed shift from popular national brands to private labels created by the store.

"That led to further defection of customers from Bed Bath & Beyond and further pressure on their sales trends," Basham told NPR.

In 2019, the retailer hired former Target executive Mark Tritton as CEO. Part of his plan to rehabilitate the company was to sell merchandise on private labels specific to Bed Bath & Beyond like Target does, but the idea didn't catch on in the same way.

"At Target, there are a lot of consumables and other things [customers] went to the store for, and they came to like and enjoy the private label brands they saw," Basham said. "You didn't have that draw at Bed Bath & Beyond."

Tritton left the company in June.

Though Bed Bath & Beyond got a boost early in the pandemic when many people were spending more time at home, the gains didn't last, and earnings have continued to drop.

The company said this week that it had net sales of about $1.45 billion in the second quarter of this fiscal year – a roughly 26% drop from the same period last year.

Director and interim CEO Sue Gove said Bed Bath & Beyond, after taking a "thorough look at our business," is now making some major changes.

The company is expecting an infusion of outside financing from J.P. Morgan and the investment firm Sixth Street Partners. It's bringing back some beloved national brands, the company said, and it will try to reengage with customers through its loyalty program.