Bed Bath sees more room for growth
July 7, 2003-- Home Textiles Today,
Acquisitions are not the sole route for growth at Bed Bath & Beyond, which recently completed its second purchase in two years. However, being a better merchant is.
"There's enormous opportunity to continue to improve what we do," said Steve Temares, president and ceo, after the annual meeting here on June 26. Acquisitions are not an independent strategy, he added. "We look at all available opportunities," including internationally and online.
"We have a lot of cash and have had a healthy multiple [price-earnings ratio] for many years," he said. However, the company doesn't need a separate task force to look at such propositions. "We get a lot of opportunities sent to us."
Though the company has played with the size of its stores, which include a few 120,000-square-foot units, being a decentralized organization gives it the luxury of not having to have a prototype, but instead it can appropriately size the store for the market it serves, Temares said. It's a matter of "optimizing the productivity of our stores."
He said Bed Bath can become better merchants incrementally instead by increasing an existing store of 23,000 square feet, for example, to 28,000 or 30,000. A few customers are still surprised when they find out that the retailer is a national chain, and not a mom-and-pop store, he added, which he considered the highest compliment.
Having purchased Christmas Tree Shops last month, Len Feinstein, co-chairman, said during the meeting that its assortment is "extremely complementary to Bed Bath & Beyond's," and Bed Bath expects contributions from it for many years. It will continue to grow both the Harmon and Christmas Tree Shops brands.
In 2003, the retailer will open 80 to 90 units, for a total of at least 570 at yearend. Substantial expansion opportunities still abound, executives said, and the retailer believes it can eventually achieve 950 stores nationwide. Net sales totaled $3.67 billion for the year ended March 1, an increase of 25.2 percent, while sales for the first quarter ended May 31 increased 15.1 percent to 893.9 million.
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