Bed Bath & Beyond: Not Soft on Soft Home
June 23, 2011-- Home Textiles Today,
Morristown, N.J. - The home textiles industry should not read into the fact that soft home's percentage of overall sales at Bed Bath & Beyond has slipped as any indication that the big-box retailer is any less focused on the category.
Instead, it's just a function of the store adding merchandise classifications on the hard goods side that are tipping the ratio more towards the non-textiles business.
In comments to Home Textiles Today after the company's annual meeting here today - a typically brisk event that ran all of 17 minutes this year - Steve Temares, ceo and president, said the expansion of categories like food, beauty and fashion accessories has contributed to soft home becoming a smaller part of overall sales, not a de-emphasis of the category.
"We are bed and bath," he said, "but when you add new categories, you do shrink the percentage of business in some existing areas."
Soft home accounts for 41% of company sales, Bed Bath said in its annual proxy statement, down from 43% two years ago, though even with last year.
The expansion into some of these new categories is part of the overall strategy to get existing customers to buy more at the store. "We want to follow our customers through their life cycles," he said, indicating that categories like beauty and food were growth vehicles for the company.
While Bed Bath & Beyond kept to its usual policy of disclosing little about its operations beyond what is required by law, Temares did say the increase in raw materials costs was a big issue for the retailer.
"We're experiencing some inflation in commodity prices, and we are watching what is happening in the marketplace."
He said passing along those price increases was very difficult in this environment, but wouldn't say how much of that Bed Bath is currently doing.
"We don't think the consumer is in a position to accept price increases, not that there aren't certain items where there have been some. We just don't believe there is tremendous elasticity in the marketplace."
Unlike some retailers in the apparel space, like H&M, who are being confronted with similar increases in costs but have publicly stated they will not pass those along, Temares said, "We are not in a position to say we won't pass along price increases."
At the meeting, the twentieth since the company went public, Bed Bath & Beyond said it continues to "never be satisfied" despite its impressive 9.7% sales increase - including 7% comp store sales- in the first quarter of this year.
"Everything we do, we believe we can do better in the future," said Len Feinstein, co-chair and co-founder of the company.
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