Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenebek on Bloomberg Radio.
Speaker 2: All right, we're going to switch gears a little bit
Speaker 2: because we have a great guest with us in studio here.
Speaker 2: I don't know if you've been on overstock dot Com today, Tim,
Speaker 2: but if you load that in, you're going to get
Speaker 2: redirected to the bed Bath and Beyond website because Overstock
Speaker 2: dot Com is now operating as bed Bath and Beyond
Speaker 2: in the US following the rebrand in Canada. And we
Speaker 2: are joined by the CEO, Jonathan Johnson in studio. Jonathan,
Speaker 2: thank you so much for coming in today. I am
Speaker 2: currently shopping for some midcentury modern products on the website here.
Speaker 2: But also previously, while I was working, I did a
Speaker 2: video on bed Bath and Beyond and the title was
Speaker 2: bed Bath and Bankruptcy. How are you planning to leverage
Speaker 2: the assets and ip that you spent a little under
Speaker 2: twenty two million dollars on to leverage the brand without
Speaker 2: that same ending.
Speaker 1: Yeah, that's a great question. You know.
Speaker 3: We we've long liked and looked at bed Bath and
Speaker 3: Beyond as a brand and as a loyal customer base.
Speaker 3: We understand it's business fell on hard times. Our view
Speaker 3: is that management can kill companies, but none necessarily brands.
Speaker 3: And before we purchased the brand, we did some consumer
Speaker 3: research and we saw that in the home space, bed
Speaker 3: Bath and Beyond was still a top five brand, well known,
Speaker 3: well trusted, and associated with home. Overstock, on the other hand,
Speaker 3: has a business model that really works, but a brand
Speaker 3: that was actually creating some headwind. We started two and
Speaker 3: a half decades ago as a liquidator, but it's been
Speaker 3: twenty years since we were a liquidator and a lot
Speaker 3: of our customers still were not and potential customers still
Speaker 3: were not associating us with home products, home furniture. They
Speaker 3: were associating with liquidations. So we thought, why don't we
Speaker 3: take our great business model and this great consumer, iconic
Speaker 3: consumer brand that is bed Bath and Beyond, put them
Speaker 3: together and it allows us to really rebrand in a
Speaker 3: way that's a lot less expensive, a lot less time consuming.
Speaker 3: Hasn't really been done before, uh And when we did
Speaker 3: it started last month in Canada to test it, it
Speaker 3: really resonated.
Speaker 2: Well, So let's see what's the impact on revenue.
Speaker 1: Well, hard to know just yet.
Speaker 3: We've been kind of quiet about the impact on revenue
Speaker 3: in Canada, but it was significant.
Speaker 2: What is significant?
Speaker 3: You know, I'm going to be I'm going to be
Speaker 3: very careful not to talk about We had our investor
Speaker 3: call last week. We didn't we didn't talk about it,
Speaker 3: but something significant enough that we wanted to rush and
Speaker 3: do this rebrand as soon as possible. In the US
Speaker 3: that going out of business brick and mortar stores just
Speaker 3: closed this weekend and we're up and run today. That
Speaker 3: I think that tells you that it's meaningful for us.
Speaker 4: So I'm curious about the experience that people have shopping
Speaker 4: at the new bed Bath and Beyond versus the old
Speaker 4: bed Bath and Beyond and versus that Overstock. Is the
Speaker 4: experience that you're going to get when you visit Overstock's
Speaker 4: website now goes to bed Bath and Beyond. Is that
Speaker 4: a bed Bath and Beyond experience or is it an
Speaker 4: Overstock experience?
Speaker 1: I think it's a mix.
Speaker 3: And by the way, those customer sets have a lot
Speaker 3: of overlap in their behavioral demographic. You know today when
Speaker 3: you go to that site, it's gone from red the
Speaker 3: Overstock customer, to color to blue the bed Bath and
Speaker 3: Beyond color the Overstock logo is still there today.
Speaker 1: I see it.
Speaker 4: That's the rewards club logo.
Speaker 3: Well, and it's the rewards club logo. We will sunset
Speaker 3: that over time. We just want our overstock legacy overstock
Speaker 3: customer to feel comfortable the taxonomy and the search will
Speaker 3: feel very comfortable, very familiar, or the over customer.
Speaker 1: There's a little bit.
Speaker 3: More promotion and prominence to bed bath and kitchen products sure,
Speaker 3: so that the bed Bath and Beyond legacy customer feels
Speaker 3: comfortable there, but it will really feel like both for
Speaker 3: a time, but morphing to bed Bath because that's who
Speaker 3: we want to become.
Speaker 2: You've also got the classic tried and true bed Bath
Speaker 2: and Beyond coupon offerings advertised at the top of the page.
Speaker 2: That is part of what people thought was a potential
Speaker 2: downfall for bed Bath and Beyond. So how are you
Speaker 2: thinking about some of the things that made bed Bath
Speaker 2: and Beyond so well known. But also we're a little
Speaker 2: bit of a tailwind or headwind rather for them.
Speaker 3: So we are a promotion We've always been a promotional
Speaker 3: company with with site sales, with coupons. As we do
Speaker 3: this rebrand launch. The coupons are big, they're bed Bath
Speaker 3: and Beyond.
Speaker 1: Esque size over time.
Speaker 3: They won't be that big always because our prices have
Speaker 3: been sharper.
Speaker 1: But for that Bed Bath and Beyond.
Speaker 3: Customer who has loved the coupon, what they really will
Speaker 3: love is the new bed Bath and Beyond mobile app.
Speaker 3: If you download that today, there's a nice coupon there.
Speaker 3: We will continue to push promotions that way. That's been
Speaker 3: a hugely successful thing for Overstock, and we want it
Speaker 3: to be that way for the new bed Bath and Beyond.
Speaker 4: Bricks and mortar strategy, is there one?
Speaker 3: Yeah, there is, and it's not to have it And
Speaker 3: so you know, we never say never, will continue to
Speaker 3: look at it. But we like our asset Light business model.
Speaker 3: We think part of what brought the prior Bed Bath
Speaker 3: and Beyond down was lots of leases, lots of inventory
Speaker 3: moving away from name band product to private label. We
Speaker 3: like our business model asset light, name brand.
Speaker 2: Uh.
Speaker 3: So we never say never, but we say never for now.
Speaker 3: If that moron makes sense.
Speaker 4: That makes sense. But I do wonder because some of
Speaker 4: the products are so big, some of the products people
Speaker 4: would argue you need to be tried. How do you
Speaker 4: get the consumer past that?
Speaker 3: So I think Overstock has done really well with that,
Speaker 3: and so for the typical bed and bath product linens,
Speaker 3: small appliances, kitchen where that seems like it will fit
Speaker 3: really well. What Overstock is historically been good at is area, rugs, sofas,
Speaker 3: patio furniture.
Speaker 4: This is the beyond part. It is the beyond bed
Speaker 4: bath and Beyond. We're good at the bed and the bath,
Speaker 4: and I would say Overstock was the beyond.
Speaker 3: And I would say it's a much bigger, better beyond now.
Speaker 3: The number of products that are available on the new
Speaker 3: bed Bath and Beyond site is much bigger and it's
Speaker 3: a lot of beyond and so so we think we've
Speaker 3: done well at that, even with the headwind of kind
Speaker 3: of this Overstock brand that didn't fit who we were.
Speaker 3: We think with bed Bath and Beyond, that headwind turns
Speaker 3: into a tailwind.
Speaker 2: So, as you know, revenue at Overstock and formerly bed
Speaker 2: Bath and Beyond had been falling year over year. I
Speaker 2: know you won't give a specific but what inning would
Speaker 2: you say we're in when it comes to reversing that.
Speaker 3: Well, I think the economy has been particularly tough for
Speaker 3: our industry. The pandemic was huge tailwind, you know, and
Speaker 3: everyone got that pandemic bounce, and then I think, well,
Speaker 3: the country may have avoided a recession. I think our
Speaker 3: industry did not. Furnithing and home furnishings have been in
Speaker 3: a recession. I think that's normalizing now to seasonal trends,
Speaker 3: but it's not back to normal as far as what
Speaker 3: people are spending their money on. It's still very much experiential.
Speaker 3: It's it's going to the Taylor Swift concert. It's it's
Speaker 3: doing those kinds of things that will come back. And
Speaker 3: I think our playing offense during this lower time in
Speaker 3: our industry cycle, when the cycle comes back, we'll be
Speaker 3: able to slingshot out bigger and stronger.
Speaker 2: How would you feel if you became a meme stock,
Speaker 2: a lot, bath and beyond.
Speaker 1: We don't want to be a memestock.
Speaker 3: We want to we want to perform based on on
Speaker 3: We want to be rewarded based on performance. So when
Speaker 3: it's time to change our ticker, I can tell you
Speaker 3: one ticker we won't use, and that's BBB Y because
Speaker 3: we don't want to go back to that place.
Speaker 4: Yeah, how's the consumer right now?
Speaker 1: The consumer is out there, Uh, they're looking.
Speaker 3: For deals and so for example, around fourth of July.
Speaker 3: We had a great Fourth of July. We had a
Speaker 3: great Memorial Day. We expect to have a great Labor
Speaker 3: Day because it's big promotions that are going on. The
Speaker 3: consumer has money to spend, but they want to be
Speaker 3: careful and make sure they're getting a great deal.
Speaker 4: Do you think there's going to be a.
Speaker 1: Well, I'm hopeful there's.
Speaker 3: Not, particularly since I think this industry has been in
Speaker 3: its mini recession as it is. By the way, I
Speaker 3: think some of the things that are fending off a recession,
Speaker 3: like higher interest rates, are actually pushing us back down.
Speaker 3: When mortgage rates goes up go up, people aren't moving.
Speaker 3: It means they're not buying more furniture. It means they're
Speaker 3: not redecorating at the same level. So what keeps the
Speaker 3: country out of a recession ultimately is good for us,
Speaker 3: but short term it's probably a little makes it a
Speaker 3: little tougher.
Speaker 2: It's really interesting to think about you guys being tied
Speaker 2: closely with the housing data that we cover as well.
Speaker 2: Thank you so much, Jonathan, really really appreciate your time
Speaker 2: joining us in studio today. Again overstock dot Com. If
Speaker 2: you load that up right now, you're going to see
Speaker 2: bedbath and beyond on your screen. Really interesting talking with
Speaker 2: the CEO Jonathan Johnson here. Thank you so much for
Speaker 2: that