Bed Bath & Beyond (BBBY) has announced its bankruptcy.
Source: Pixabay.com
The bankruptcy announcement came a few months after the company voiced concerns about its future. The seller of household goods, whose history of presence on the market dates back 52 years, failed due to the lack of the ability to provide financing that would ensure further functioning.
On the company’s website last Sunday, April 23, a message appeared with words of gratitude to regular customers and a statement about making a difficult decision to cease operations. This report notes that the company’s stores and its branches buybuy Baby will remain open.
Experts say that the bankruptcy is partly the result of the fact that the company did not switch to private-label products in time. Also, the inability to compete with online retailers led to a sad result.
In the era of the coronavirus pandemic, the transition to private trademarks made sense, since in this case a higher margin was provided and an opportunity to stand out among other market participants appeared. But the concept of Bed Bath & Beyond of the corresponding orientation turned out to be unsuccessful. The transition to private label products was carried out at a time when global supply chains were disrupted, which is why the delivery was delayed and prices were rising.
The company also agreed to cooperate with a large number of private brands without the infrastructure to support them. At a certain stage of the pandemic, the demand for goods began to fall, which negatively affected sales volumes.
BBBY first reported a decline in sales figures in 2019. Warren Eisenberg, one of the founders of the network, said that the moment was missed to start the active activity on the Internet.
For many American consumers, the retailer’s withdrawal from the market came as a surprise. The company was in a difficult situation, but in the mass consciousness, it was defined in the category of traditional brands that in a certain sense accompany a person’s life.
The example of a retailer is indicative and symptomatic from the point of view of the manifestation of the specifics of the new times on a specific example. The company had a special status in the market, but it turned out to be a merit of the past and a meaningless formality in the context of modernity. Advanced technologies have intensified the development of e-commerce, whereas other leaders, for example, Amazon.
Earlier this year, BBBY CEO Sue Gove, speaking to investors, did not talk about the strategic mistake of ignoring the digital trading space but said that the firm realized and accepted the fact that consumers shop differently and current shopping habits assign a secondary role to visit stores.
As we have reported earlier, Crypto Broker Genesis Prepares to File for Bankruptcy.
