Bed Bath & Beyond Continues to Win Through Localization

Bed Bath & Beyond—operators of Bed Bath & Beyond stores, Christmas Tree Shops, buybuy BABY stores, Harmon and Harmon Face Values brands, announced a 35% increase in net earnings for the quarter that ended August 28, 2010. Comp store sales increased 7.4% during the quarter, compared to a 0.6% decline during the same period last year.

More important, however, was the announcement by the retailer's top management during a conference call discussing these results that BB&B continues to spend on new stores, existing store improvements and information technology enhancements. In fact, capital spending during the first half of 2010 was approximately $84 million, and anticipated spending for the full year is planned at $225 million. This includes 15 new stores for fiscal 2010 and a focus on renovating existing stores to "enhance the customer's shopping experience," according to Warren Eisenberg, the retailer's co-chairman.

BB&B is also committed to localization as a success strategy. Gene Castagna, CFO and treasurer, noted that "Inventories continue to be tailored by store to meet the anticipated demands of our customers and are in good condition. As of August 28, 2010, inventories were approximately $1.9 billion or $55.78 per square foot, an increase of approximately 3.4% on a per square foot basis versus last year."

In addition, Eisenberg said that Bed Bath & Beyond has a “culture which takes advantage of the knowledge, the independence, and the customer focus of our associates…and has always been the foundation of our long-term performance and allows us to respond more quickly to local market demand and the changing economic conditions on a market-by-market basis."

This points to the fact that in the today’s customer-driven retail environment, it is vital to localize assortments to win and stay ahead. Technology and a decentralized culture are crucial to be able to do this effectively, and Bed Bath & Beyond appears to be taking the steps to win in this environment.

While the executives on the call didn't refer specifically to the company's technology providers, IHL’s SOPHIA database shows that the retailer uses JDA (and formerly i2, now part of JDA) for its merchandising systems and SAS for forecasting.
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