WEBVTT - Bed Bath and a Better Beyond

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Tim

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<v Speaker 1>Stenebek on Bloomberg Radio.

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<v Speaker 2>All right, we're going to switch gears a little bit

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<v Speaker 2>because we have a great guest with us in studio here.

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<v Speaker 2>I don't know if you've been on overstock dot Com today, Tim,

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<v Speaker 2>but if you load that in, you're going to get

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<v Speaker 2>redirected to the bed Bath and Beyond website because Overstock

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<v Speaker 2>dot Com is now operating as bed Bath and Beyond

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<v Speaker 2>in the US following the rebrand in Canada. And we

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<v Speaker 2>are joined by the CEO, Jonathan Johnson in studio. Jonathan,

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<v Speaker 2>thank you so much for coming in today. I am

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<v Speaker 2>currently shopping for some midcentury modern products on the website here.

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<v Speaker 2>But also previously, while I was working, I did a

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<v Speaker 2>video on bed Bath and Beyond and the title was

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<v Speaker 2>bed Bath and Bankruptcy. How are you planning to leverage

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<v Speaker 2>the assets and ip that you spent a little under

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<v Speaker 2>twenty two million dollars on to leverage the brand without

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<v Speaker 2>that same ending.

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<v Speaker 1>Yeah, that's a great question. You know.

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<v Speaker 3>We we've long liked and looked at bed Bath and

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<v Speaker 3>Beyond as a brand and as a loyal customer base.

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<v Speaker 3>We understand it's business fell on hard times. Our view

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<v Speaker 3>is that management can kill companies, but none necessarily brands.

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<v Speaker 3>And before we purchased the brand, we did some consumer

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<v Speaker 3>research and we saw that in the home space, bed

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<v Speaker 3>Bath and Beyond was still a top five brand, well known,

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<v Speaker 3>well trusted, and associated with home. Overstock, on the other hand,

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<v Speaker 3>has a business model that really works, but a brand

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<v Speaker 3>that was actually creating some headwind. We started two and

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<v Speaker 3>a half decades ago as a liquidator, but it's been

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<v Speaker 3>twenty years since we were a liquidator and a lot

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<v Speaker 3>of our customers still were not and potential customers still

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<v Speaker 3>were not associating us with home products, home furniture. They

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<v Speaker 3>were associating with liquidations. So we thought, why don't we

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<v Speaker 3>take our great business model and this great consumer, iconic

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<v Speaker 3>consumer brand that is bed Bath and Beyond, put them

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<v Speaker 3>together and it allows us to really rebrand in a

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<v Speaker 3>way that's a lot less expensive, a lot less time consuming.

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<v Speaker 3>Hasn't really been done before, uh And when we did

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<v Speaker 3>it started last month in Canada to test it, it

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<v Speaker 3>really resonated.

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<v Speaker 2>Well, So let's see what's the impact on revenue.

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<v Speaker 1>Well, hard to know just yet.

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<v Speaker 3>We've been kind of quiet about the impact on revenue

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<v Speaker 3>in Canada, but it was significant.

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<v Speaker 2>What is significant?

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<v Speaker 3>You know, I'm going to be I'm going to be

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<v Speaker 3>very careful not to talk about We had our investor

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<v Speaker 3>call last week. We didn't we didn't talk about it,

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<v Speaker 3>but something significant enough that we wanted to rush and

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<v Speaker 3>do this rebrand as soon as possible. In the US

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<v Speaker 3>that going out of business brick and mortar stores just

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<v Speaker 3>closed this weekend and we're up and run today. That

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<v Speaker 3>I think that tells you that it's meaningful for us.

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<v Speaker 4>So I'm curious about the experience that people have shopping

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<v Speaker 4>at the new bed Bath and Beyond versus the old

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<v Speaker 4>bed Bath and Beyond and versus that Overstock. Is the

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<v Speaker 4>experience that you're going to get when you visit Overstock's

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<v Speaker 4>website now goes to bed Bath and Beyond. Is that

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<v Speaker 4>a bed Bath and Beyond experience or is it an

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<v Speaker 4>Overstock experience?

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<v Speaker 1>I think it's a mix.

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<v Speaker 3>And by the way, those customer sets have a lot

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<v Speaker 3>of overlap in their behavioral demographic. You know today when

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<v Speaker 3>you go to that site, it's gone from red the

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<v Speaker 3>Overstock customer, to color to blue the bed Bath and

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<v Speaker 3>Beyond color the Overstock logo is still there today.

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<v Speaker 1>I see it.

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<v Speaker 4>That's the rewards club logo.

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<v Speaker 3>Well, and it's the rewards club logo. We will sunset

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<v Speaker 3>that over time. We just want our overstock legacy overstock

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<v Speaker 3>customer to feel comfortable the taxonomy and the search will

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<v Speaker 3>feel very comfortable, very familiar, or the over customer.

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<v Speaker 1>There's a little bit.

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<v Speaker 3>More promotion and prominence to bed bath and kitchen products sure,

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<v Speaker 3>so that the bed Bath and Beyond legacy customer feels

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<v Speaker 3>comfortable there, but it will really feel like both for

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<v Speaker 3>a time, but morphing to bed Bath because that's who

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<v Speaker 3>we want to become.

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<v Speaker 2>You've also got the classic tried and true bed Bath

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<v Speaker 2>and Beyond coupon offerings advertised at the top of the page.

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<v Speaker 2>That is part of what people thought was a potential

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<v Speaker 2>downfall for bed Bath and Beyond. So how are you

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<v Speaker 2>thinking about some of the things that made bed Bath

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<v Speaker 2>and Beyond so well known. But also we're a little

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<v Speaker 2>bit of a tailwind or headwind rather for them.

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<v Speaker 3>So we are a promotion We've always been a promotional

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<v Speaker 3>company with with site sales, with coupons. As we do

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<v Speaker 3>this rebrand launch. The coupons are big, they're bed Bath

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<v Speaker 3>and Beyond.

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<v Speaker 1>Esque size over time.

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<v Speaker 3>They won't be that big always because our prices have

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<v Speaker 3>been sharper.

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<v Speaker 1>But for that Bed Bath and Beyond.

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<v Speaker 3>Customer who has loved the coupon, what they really will

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<v Speaker 3>love is the new bed Bath and Beyond mobile app.

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<v Speaker 3>If you download that today, there's a nice coupon there.

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<v Speaker 3>We will continue to push promotions that way. That's been

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<v Speaker 3>a hugely successful thing for Overstock, and we want it

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<v Speaker 3>to be that way for the new bed Bath and Beyond.

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<v Speaker 4>Bricks and mortar strategy, is there one?

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<v Speaker 3>Yeah, there is, and it's not to have it And

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<v Speaker 3>so you know, we never say never, will continue to

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<v Speaker 3>look at it. But we like our asset Light business model.

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<v Speaker 3>We think part of what brought the prior Bed Bath

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<v Speaker 3>and Beyond down was lots of leases, lots of inventory

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<v Speaker 3>moving away from name band product to private label. We

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<v Speaker 3>like our business model asset light, name brand.

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<v Speaker 2>Uh.

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<v Speaker 3>So we never say never, but we say never for now.

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<v Speaker 3>If that moron makes sense.

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<v Speaker 4>That makes sense. But I do wonder because some of

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<v Speaker 4>the products are so big, some of the products people

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<v Speaker 4>would argue you need to be tried. How do you

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<v Speaker 4>get the consumer past that?

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<v Speaker 3>So I think Overstock has done really well with that,

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<v Speaker 3>and so for the typical bed and bath product linens,

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<v Speaker 3>small appliances, kitchen where that seems like it will fit

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<v Speaker 3>really well. What Overstock is historically been good at is area, rugs, sofas,

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<v Speaker 3>patio furniture.

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<v Speaker 4>This is the beyond part. It is the beyond bed

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<v Speaker 4>bath and Beyond. We're good at the bed and the bath,

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<v Speaker 4>and I would say Overstock was the beyond.

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<v Speaker 3>And I would say it's a much bigger, better beyond now.

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<v Speaker 3>The number of products that are available on the new

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<v Speaker 3>bed Bath and Beyond site is much bigger and it's

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<v Speaker 3>a lot of beyond and so so we think we've

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<v Speaker 3>done well at that, even with the headwind of kind

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<v Speaker 3>of this Overstock brand that didn't fit who we were.

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<v Speaker 3>We think with bed Bath and Beyond, that headwind turns

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<v Speaker 3>into a tailwind.

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<v Speaker 2>So, as you know, revenue at Overstock and formerly bed

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<v Speaker 2>Bath and Beyond had been falling year over year. I

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<v Speaker 2>know you won't give a specific but what inning would

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<v Speaker 2>you say we're in when it comes to reversing that.

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<v Speaker 3>Well, I think the economy has been particularly tough for

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<v Speaker 3>our industry. The pandemic was huge tailwind, you know, and

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<v Speaker 3>everyone got that pandemic bounce, and then I think, well,

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<v Speaker 3>the country may have avoided a recession. I think our

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<v Speaker 3>industry did not. Furnithing and home furnishings have been in

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<v Speaker 3>a recession. I think that's normalizing now to seasonal trends,

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<v Speaker 3>but it's not back to normal as far as what

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<v Speaker 3>people are spending their money on. It's still very much experiential.

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<v Speaker 3>It's it's going to the Taylor Swift concert. It's it's

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<v Speaker 3>doing those kinds of things that will come back. And

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<v Speaker 3>I think our playing offense during this lower time in

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<v Speaker 3>our industry cycle, when the cycle comes back, we'll be

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<v Speaker 3>able to slingshot out bigger and stronger.

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<v Speaker 2>How would you feel if you became a meme stock,

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<v Speaker 2>a lot, bath and beyond.

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<v Speaker 1>We don't want to be a memestock.

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<v Speaker 3>We want to we want to perform based on on

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<v Speaker 3>We want to be rewarded based on performance. So when

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<v Speaker 3>it's time to change our ticker, I can tell you

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<v Speaker 3>one ticker we won't use, and that's BBB Y because

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<v Speaker 3>we don't want to go back to that place.

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<v Speaker 4>Yeah, how's the consumer right now?

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<v Speaker 1>The consumer is out there, Uh, they're looking.

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<v Speaker 3>For deals and so for example, around fourth of July.

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<v Speaker 3>We had a great Fourth of July. We had a

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<v Speaker 3>great Memorial Day. We expect to have a great Labor

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<v Speaker 3>Day because it's big promotions that are going on. The

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<v Speaker 3>consumer has money to spend, but they want to be

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<v Speaker 3>careful and make sure they're getting a great deal.

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<v Speaker 4>Do you think there's going to be a.

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<v Speaker 1>Well, I'm hopeful there's.

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<v Speaker 3>Not, particularly since I think this industry has been in

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<v Speaker 3>its mini recession as it is. By the way, I

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<v Speaker 3>think some of the things that are fending off a recession,

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<v Speaker 3>like higher interest rates, are actually pushing us back down.

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<v Speaker 3>When mortgage rates goes up go up, people aren't moving.

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<v Speaker 3>It means they're not buying more furniture. It means they're

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<v Speaker 3>not redecorating at the same level. So what keeps the

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<v Speaker 3>country out of a recession ultimately is good for us,

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<v Speaker 3>but short term it's probably a little makes it a

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<v Speaker 3>little tougher.

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<v Speaker 2>It's really interesting to think about you guys being tied

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<v Speaker 2>closely with the housing data that we cover as well.

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<v Speaker 2>Thank you so much, Jonathan, really really appreciate your time

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<v Speaker 2>joining us in studio today. Again overstock dot Com. If

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<v Speaker 2>you load that up right now, you're going to see

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<v Speaker 2>bedbath and beyond on your screen. Really interesting talking with

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<v Speaker 2>the CEO Jonathan Johnson here. Thank you so much for

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<v Speaker 2>that