WEBVTT - Bed Bath & Beyond 0:00:04.120 --> 0:00:07.520 Welcome to Business on the Brink, a production from I 0:00:07.680 --> 0:00:13.920 Heart Radio and how stuff works, Bed Bath and Beyond, 0:00:14.040 --> 0:00:16.920 where you can get a spatula, a bathroom scale, and 0:00:17.040 --> 0:00:20.040 a face mask that looks like a panda. We're building 0:00:20.040 --> 0:00:23.000 a wedding registry. Is kind of like playing a video game. 0:00:23.239 --> 0:00:27.280 But the coupons and return policies that initially brought customers 0:00:27.320 --> 0:00:31.640 to stores soon hit their expiration date on effectiveness, leaving 0:00:31.680 --> 0:00:34.640 management grasping for straws on how to turn the company 0:00:34.640 --> 0:00:37.440 around and learning the hard lesson that more isn't always 0:00:37.479 --> 0:00:41.479 better and all these aren't always goodies. This is I 0:00:41.560 --> 0:00:44.360 can't believe I have to say this, Bed Bath and 0:00:44.400 --> 0:00:55.040 Beyond on Business on the Brink. Hey, everybody, after that 0:00:55.120 --> 0:00:58.600 alliterative opening, I am Jonathan Strickland and I'm Aero Caston, 0:00:58.680 --> 0:01:01.800 and you did a really good job on at one take. Yeah, yeah, 0:01:02.000 --> 0:01:04.720 that's I mean, you know, rubber baby, buggy bumpers. What 0:01:04.800 --> 0:01:10.759 can I say? So this was a suggestion from somebody 0:01:10.760 --> 0:01:14.440 whose name I think I recognize, well, i'd hope so, 0:01:14.600 --> 0:01:19.360 because you know them, it's my mom. Hi mom, don 0:01:19.680 --> 0:01:22.839 your mom suggested this. My mom suggested that she listens 0:01:22.880 --> 0:01:27.000 to the show every week. So thanks mom, Thanks thanks 0:01:27.000 --> 0:01:29.920 Ariel's Mom. Yeah. So we're going to cover Bed Bath 0:01:30.080 --> 0:01:34.119 and Beyond, a company that has a similar sort of 0:01:34.840 --> 0:01:38.800 history as some other big box retail companies have had, 0:01:39.200 --> 0:01:44.560 but there's some particulars in this one. They get awfully juicy. Also, Um, 0:01:44.720 --> 0:01:46.800 one of the things I think we need to start 0:01:46.800 --> 0:01:49.360 off with is the first note you have here. It's 0:01:49.400 --> 0:01:53.160 about the founders, the two founders being at Warren Eisenberg 0:01:53.240 --> 0:01:56.640 and Leonard Feinstein, who founded the company in nineteen seventy one. 0:01:57.040 --> 0:01:59.840 Before we go anywhere in this episode, I just want 0:01:59.880 --> 0:02:03.760 to point out it pays to be the kid of 0:02:03.800 --> 0:02:06.400 the two founders of Bed Bath and Beyond for reasons 0:02:06.400 --> 0:02:10.440 we will get into this episode. Yes, Um, you know, 0:02:10.520 --> 0:02:12.200 like it pays to be the kid of someone who 0:02:12.200 --> 0:02:14.680 listens to your podcast because they give you good suggestions. Anyhow, 0:02:15.600 --> 0:02:19.200 not quite the same. Uh So. Yes, Warren and Leonard 0:02:19.320 --> 0:02:23.720 founded the first bed Bath and Beyond in ninete in Springfield, 0:02:23.800 --> 0:02:25.679 New Jersey, and at the time it was just bed 0:02:25.680 --> 0:02:29.120 and Bath. Yeah, there's there's no beyond yet. No. No, 0:02:29.280 --> 0:02:31.560 they were not like Buzz Lightyear say. It was only 0:02:31.600 --> 0:02:34.800 when they when they hired a young promising Buzz Lightyear 0:02:35.080 --> 0:02:37.880 to join the company that they got. No, they literally 0:02:37.880 --> 0:02:40.919 were selling bed and bath items, so there was no 0:02:41.200 --> 0:02:46.040 call for a Beyond yet. So then in nineteen seventy seven, 0:02:46.720 --> 0:02:49.120 they you know, so they've been operating this for a 0:02:49.120 --> 0:02:51.960 few years now, they bring in a guy called Arthur 0:02:52.080 --> 0:02:55.560 Stark to head the company as president. Right to act 0:02:55.560 --> 0:02:58.280 as president for the company, they the founders would essentially 0:02:58.320 --> 0:03:01.799 stay on as members of the board of directors for 0:03:02.160 --> 0:03:05.160 almost the entire history of Bed Bath and Beyond. Yeah, 0:03:05.160 --> 0:03:08.120 and we see this oftentimes someone will start a company 0:03:08.160 --> 0:03:09.920 and they'll run it by themselves for a little bit 0:03:10.000 --> 0:03:11.760 until they go, well, I really need a professional in 0:03:12.040 --> 0:03:15.600 right this this concern has grown to the point where 0:03:15.680 --> 0:03:19.040 it is beyond my expertise to manage it. And so 0:03:19.160 --> 0:03:21.359 you bring in somebody else to come in and run 0:03:21.440 --> 0:03:24.960 the show while you still oversee the general direction of 0:03:25.000 --> 0:03:29.119 the company. Yeah, so things were going really well. Like 0:03:29.880 --> 0:03:34.120 they continued to grow as a company over the seventies 0:03:34.160 --> 0:03:37.480 and into the eighties, right, Yeah. By five, they expanded 0:03:37.480 --> 0:03:41.880 to seventeen locations and they opened their first superstore, and 0:03:41.960 --> 0:03:43.920 that's that's when they changed their name to Bed Bath 0:03:43.960 --> 0:03:48.520 and Beyond. Because they started selling the Beyond. Yeah, the 0:03:49.240 --> 0:03:52.960 stuff that was not easily fitting wouldn't easily fit into 0:03:53.000 --> 0:03:56.480 the better bath. I mean so at the time, primarily 0:03:56.760 --> 0:03:59.880 kitchen stuff. Yeah, and you know they'd go into deck 0:04:00.080 --> 0:04:04.120 or in other things. Uh, but that that took some 0:04:04.200 --> 0:04:06.720 finag links. So, and this is right around the time 0:04:06.760 --> 0:04:10.640 where superstores were really starting to take off as a 0:04:10.680 --> 0:04:14.200 concept in the mid eighties, like they had come out 0:04:14.280 --> 0:04:17.000 originally in the seventies, but this is when you started 0:04:17.040 --> 0:04:22.040 seeing other types of stores kind of following in those footsteps, 0:04:22.440 --> 0:04:25.839 and uh, and this is one of them. So by 0:04:25.920 --> 0:04:28.600 one they had they were doing around a hundred thirty 0:04:28.600 --> 0:04:32.159 four million dollars in revenue and sales. Uh. And then 0:04:32.560 --> 0:04:36.360 the following year they became a publicly traded company and 0:04:36.400 --> 0:04:39.720 they were trading stock on the NASDACS. Yes, we're going 0:04:39.720 --> 0:04:42.599 through it quickly because for a while, uh, that bath 0:04:42.600 --> 0:04:46.520 thing beyond just did really well. They were making one 0:04:46.520 --> 0:04:50.880 point nine billion dollars a year, a significant jump in 0:04:50.960 --> 0:04:54.479 just a few years. So yeah, they they were doing 0:04:54.520 --> 0:04:58.720 this largely by growing rapidly, opening up new stores. They 0:04:58.720 --> 0:05:03.599 were being very uh aggressive in expansion at that point. 0:05:03.640 --> 0:05:06.200 And this is we haven't even really opened up that 0:05:06.279 --> 0:05:08.960 can yet because we're really they really got crazy in 0:05:09.000 --> 0:05:11.400 the following decade. Yes, by the end of two thousand one, 0:05:11.440 --> 0:05:14.839 they had almost four hundred store locations and hopes to 0:05:14.880 --> 0:05:18.400 grow to up to eight hundred. Wow. Yeah, So here's 0:05:18.400 --> 0:05:21.719 the thing, growing like that, having that sort of aggressive 0:05:21.720 --> 0:05:26.159 growth strategy, opening up new stores, like actually scouting out 0:05:26.200 --> 0:05:32.680 locations and either building a structure or taking over a 0:05:32.800 --> 0:05:35.840 vacant structure. That takes a lot of effort. There is 0:05:35.880 --> 0:05:40.960 another way to grow your business quickly beyond building it yourself, 0:05:41.000 --> 0:05:49.440 and that is buy it, yes, acquiring other stores and companies, 0:05:49.720 --> 0:05:52.040 And that's what bed Bath and Beyond did. So they 0:05:52.040 --> 0:05:54.720 did a bunch of research. From what I read, they 0:05:54.760 --> 0:05:57.839 actually were very careful in their first acquisition. They wanted 0:05:57.839 --> 0:05:59.920 to buy something that could fit in well with their 0:06:00.040 --> 0:06:02.880 current brand, wasn't going to be a direct competitor for them, 0:06:02.880 --> 0:06:05.800 and had good operating margins in long term growth. Right, 0:06:05.839 --> 0:06:07.680 So I didn't want to go out and buy a 0:06:07.720 --> 0:06:10.120 company that was just going to cut into their own sales. 0:06:10.160 --> 0:06:12.560 You didn't want to have, you know, two stores in 0:06:12.640 --> 0:06:16.520 the same shopping center, for example, that are competing for 0:06:16.560 --> 0:06:19.320 the exact same customers. You're not doubling your sales that way, 0:06:19.360 --> 0:06:22.400 You're just dividing where your customers are going. So this 0:06:22.520 --> 0:06:24.640 was a very smart move on their part. It was. 0:06:25.080 --> 0:06:27.800 And in two thousand two they made the first acquisition. 0:06:27.880 --> 0:06:30.880 It was Harmon's Stores. And when I was trying to 0:06:30.880 --> 0:06:33.360 figure out who Harmon was, there is a grocery line 0:06:33.400 --> 0:06:37.440 in Utah that is also named Harman's Stores. Turns out 0:06:37.520 --> 0:06:40.680 that's not the right the right one, right, No, No, Harmon. 0:06:40.760 --> 0:06:43.120 The Harmon they bought was a health and beauty retailer 0:06:43.120 --> 0:06:46.160 in New Jersey, where they also were. Yeah, and since 0:06:46.200 --> 0:06:50.279 we're down here in Atlanta, Georgia, often these regional chains 0:06:50.400 --> 0:06:53.120 or regional stores are ones that we may not have 0:06:53.200 --> 0:06:56.320 ever encountered. Yeah. So, so we don't know how much 0:06:56.360 --> 0:06:57.960 they bought Harmon four, but we do know it was 0:06:57.960 --> 0:07:01.880 a cash acquisition. Bed Beth and Beyond has been fairly 0:07:02.480 --> 0:07:06.080 private about a lot of their financials, so as much 0:07:06.080 --> 0:07:10.520 as they can be so pretty opaque. Yes, yes, um, 0:07:10.560 --> 0:07:13.040 but Harmon's at the time was operating seven stores in 0:07:13.040 --> 0:07:15.720 three different states, and they had this was the big 0:07:15.720 --> 0:07:17.280 thing for Bed Bath and Beyond. They had their own 0:07:17.400 --> 0:07:21.240 HB a line Harmon Face Values, and that meant that 0:07:21.280 --> 0:07:25.280 bed Bath and Beyond could take this this private brand 0:07:25.680 --> 0:07:27.480 and move it into their store because they didn't have 0:07:27.640 --> 0:07:30.600 HB A but HbA fits right in when with Bath. 0:07:31.160 --> 0:07:33.960 So this way they could actually carry a brand that 0:07:34.040 --> 0:07:37.360 no other store in their space could carry apart from Harmon's, 0:07:37.360 --> 0:07:40.280 apart from Harmon's which they owned hotly as a subsidiary. 0:07:40.440 --> 0:07:44.800 So well, and then they that went so well that 0:07:44.880 --> 0:07:50.200 first acquisition that they said, well, shoot, we're professionals at this, 0:07:50.720 --> 0:07:55.240 let's really open up them purse strings and start buying stuff. Yeah, 0:07:55.280 --> 0:07:57.320 but the next thing they bought. It took me a 0:07:57.320 --> 0:07:59.320 while to figure out why. Because the next thing they 0:07:59.320 --> 0:08:01.560 bought was the Cris Smiths Tree Shops in two thousand 0:08:01.560 --> 0:08:04.800 three for two hundred million dollars, which added another twenty 0:08:04.800 --> 0:08:07.920 three subsidiary stores in five states to retinue. Now here's 0:08:07.960 --> 0:08:10.840 the weird thing is that Christmas Tree Shops is a 0:08:10.880 --> 0:08:15.520 sporting goods store. I'm lying, you are lying. I didn't 0:08:15.800 --> 0:08:18.480 I didn't look. I assume they sell Christmas trees and 0:08:18.480 --> 0:08:21.120 and like Christmas decor and things like that, ornaments and 0:08:21.120 --> 0:08:22.960 things like that, which if you go into a Bed 0:08:23.000 --> 0:08:25.920 Bath and Beyond now, because we all know that they 0:08:25.920 --> 0:08:30.360 are not absolutely Toys r US right now, well kind 0:08:30.400 --> 0:08:32.319 of like Toys r US was a year ago as 0:08:32.320 --> 0:08:35.040 of the recording of this episode. By the time this 0:08:35.080 --> 0:08:38.679 episode comes out, we don't know. Yeah. Yeah, you know 0:08:38.760 --> 0:08:41.600 they do put Christmas ornaments in Christmas decor and their 0:08:41.640 --> 0:08:46.080 stores as it's seasonally appropriate to do so. Yes, which 0:08:46.120 --> 0:08:48.840 means that since we're recording this at the beginning of September, 0:08:48.960 --> 0:08:52.079 probably tomorrow, the start putting them out. Yes. So by 0:08:52.080 --> 0:08:55.400 two thousand four, Bed, Bath and Beyond had sales of 0:08:55.600 --> 0:09:00.560 five point one billion with a B dollars. So I 0:09:00.559 --> 0:09:03.600 guess it's time to make more acquisitions. Yeah. Now, this 0:09:03.760 --> 0:09:07.079 next acquisition is one where I object strenuously to the 0:09:07.160 --> 0:09:10.920 name of the company, which is Bye Bye Baby, Buy 0:09:11.400 --> 0:09:15.360 Buy Baby, So I guess you buy babies there. That 0:09:15.920 --> 0:09:19.920 to me is incredibly problematic. No, you don't buy babies, 0:09:20.080 --> 0:09:22.760 you buy buy things for babies. It was a competitor 0:09:22.800 --> 0:09:24.959 to Babies r US. Yeah, and they bought it for 0:09:25.200 --> 0:09:28.480 sixty seven million dollars. Uh. And also part of that 0:09:28.760 --> 0:09:31.760 was to pay off some of Bye Bye Baby's debt, 0:09:31.840 --> 0:09:35.559 which was like almost twenty million at that point, Yes, 0:09:35.679 --> 0:09:38.480 Bye Bye Baby only had eight stores in four states, 0:09:39.520 --> 0:09:41.280 and the CEO of bed Bath and Beyond at the 0:09:41.320 --> 0:09:43.920 time Stephen Tamaris, who had been with bed Bath and 0:09:43.960 --> 0:09:47.160 Beyond ninety two. He became CEO in ninety seven and 0:09:47.240 --> 0:09:50.360 then CEO in two thousand three. He called the acquisition 0:09:50.400 --> 0:09:53.400 an excellent strategic fit, with the idea that a lot 0:09:53.440 --> 0:09:56.360 of their customers are either perspective or current parents. But 0:09:56.520 --> 0:09:58.679 here's the thing, Okay, here's where I was saying, it 0:09:58.840 --> 0:10:01.440 pays to be the kid of one of the founders 0:10:01.480 --> 0:10:04.160 of bed Bath and Beyond. Yes, because the person who 0:10:04.200 --> 0:10:07.679 owned Bye Bye Baby was the son of Leonard Feinstein, 0:10:07.760 --> 0:10:11.120 one of the founders, And so there were a lot 0:10:11.200 --> 0:10:13.640 of people who said this acquisition wasn't so much a 0:10:13.679 --> 0:10:16.600 strategic acquisition as it was an effort to bail out 0:10:17.400 --> 0:10:19.480 the son of a founder of bed Bath and Beyond. 0:10:19.800 --> 0:10:22.800 Because again, if you remember, we mentioned that part of 0:10:22.880 --> 0:10:28.840 that acquisition involved paying off nearly twenty million dollars in death. Yeah. Yeah, Now, 0:10:28.960 --> 0:10:32.520 two thousand seven also saw international expansion, so I mean, 0:10:32.559 --> 0:10:36.800 it's still good things even with this alleged buyout. They 0:10:36.880 --> 0:10:42.760 alleged bailout because it was indefinite buyout. You're right, Jonathan, 0:10:43.520 --> 0:10:46.560 you're very smart. Now shut up. No, please don't please, 0:10:46.600 --> 0:10:50.040 don't shut up. I don't want to do this alone. Uh. 0:10:50.440 --> 0:10:53.400 So they opened their first are in Canada, and the 0:10:53.480 --> 0:10:56.400 next year they expanded into Mexico City through a partnership 0:10:56.480 --> 0:10:59.440 with Home and More. Uh and Home and Moore would 0:10:59.440 --> 0:11:02.120 eventually change a name to that Bath and Beyond. Yes, 0:11:02.160 --> 0:11:05.839 so now they are occupying all of North America. And 0:11:05.960 --> 0:11:08.319 in two thousand and eight, it was great news for 0:11:08.400 --> 0:11:10.640 bed Bath and Beyond, but bad news for somebody else. 0:11:10.800 --> 0:11:14.839 The the business lenens in things, which you could view 0:11:14.880 --> 0:11:17.920 as the lex luthor to bed Bath and Beyond Superman. 0:11:19.440 --> 0:11:22.599 I mean, they definitely had a real close shave in 0:11:22.679 --> 0:11:26.240 two thousands. So they didn't just have a close shave, 0:11:26.280 --> 0:11:29.440 they actually closed up shop. The company went totally bankrupt. 0:11:29.920 --> 0:11:33.160 They liquidated their assets. They sold off all their brick 0:11:33.240 --> 0:11:35.800 and mortar stores. There were five hundred seventy one of 0:11:35.840 --> 0:11:38.640 them at the peak. Yeah. Now, granted they didn't sell 0:11:38.720 --> 0:11:41.800 them all off at once. It was a long, slow, 0:11:41.880 --> 0:11:46.760 painful march towards bankruptcy. And they were really the only 0:11:47.320 --> 0:11:50.360 competitor in the big box retail space for this type 0:11:50.360 --> 0:11:52.319 of stuff that bed Bath and Beyond was doing. And 0:11:52.440 --> 0:11:54.880 there were other companies that were selling stuff that bed 0:11:54.960 --> 0:11:57.800 Bath and Beyond also sold, but Lens and Things was 0:11:57.840 --> 0:12:00.720 the only one really dedicated to the exact same space, 0:12:01.520 --> 0:12:03.920 and now they were gone. So now bed Bath and 0:12:03.960 --> 0:12:08.240 Beyond was operating without a real competitor in that space. Uh. 0:12:09.320 --> 0:12:11.400 Lenons and Things, by the way, would re emerge in 0:12:11.440 --> 0:12:15.280 two thousand nine as a web based retailer, but would 0:12:15.440 --> 0:12:19.280 ultimately shut down for good Z's in two thousand eighteen. 0:12:19.360 --> 0:12:21.959 So maybe at some point we'll do another story, or 0:12:22.120 --> 0:12:24.800 maybe we'll just say, hey, do you remember that episode 0:12:24.800 --> 0:12:27.640 of bead Math and Beyond? Just do a fine copy 0:12:27.679 --> 0:12:31.280 of replace with things, which is not really the case. 0:12:31.800 --> 0:12:34.319 Very different stores now, and I mean bad Beth and 0:12:34.360 --> 0:12:37.520 Beyond would soon get a bunch of competitors, but we 0:12:37.600 --> 0:12:39.439 aren't there yet. By two thousand and eleven, they're making 0:12:39.520 --> 0:12:43.360 nine point five billion dollars so much money. Yes, And 0:12:43.559 --> 0:12:47.040 by two thousand twelve they made two more acquisitions. Okay, 0:12:47.280 --> 0:12:50.280 and uh what were those? Well? The first was cost 0:12:50.320 --> 0:12:55.240 Plus Incorporated or cost Plus World Market, which I love 0:12:55.960 --> 0:13:00.439 for four you love it for four dollars? I love it. 0:13:00.760 --> 0:13:03.520 They bought it for four dollars, But if I had 0:13:03.559 --> 0:13:07.880 four hundred million dollars, I might just be like, okay, 0:13:08.240 --> 0:13:11.360 this one cost plus, give me all your stuff, fair enough, okay. 0:13:11.800 --> 0:13:14.319 And then after that they bought Linen Holdings ll C 0:13:14.559 --> 0:13:17.360 for a hundred five million, right yes, And Linen Holdings 0:13:17.480 --> 0:13:22.360 did more industrial distribution, so bed bath and tableware and 0:13:22.480 --> 0:13:26.840 linens and textiles to things like cruise lines, food service hotels. Yeah, 0:13:27.280 --> 0:13:29.959 like all the hospitality industry and that kind of stuff 0:13:30.000 --> 0:13:33.920 as well. Got you. So we are now at a 0:13:34.000 --> 0:13:36.679 point where we're kind of at the peak of bed 0:13:36.760 --> 0:13:39.559 Bath and Beyond in two thousand eleven, which was not 0:13:39.920 --> 0:13:43.599 that long ago, really wasn't. And yet we're about to 0:13:43.920 --> 0:13:47.760 enter into an era where things would go radically in 0:13:47.840 --> 0:13:51.160 a different direction. But before we get there, I think 0:13:51.200 --> 0:13:58.240 we need to take a quick break, all right. So 0:13:58.400 --> 0:14:00.720 we're back, and we're back with bed Bath and Beyond, 0:14:00.920 --> 0:14:03.719 and now we're up to two thousand thirteen. We were 0:14:03.800 --> 0:14:07.240 still jumping forward a bit and things were still going 0:14:07.559 --> 0:14:11.880 like gang busters. They had five subsidiaries at that point. 0:14:12.640 --> 0:14:16.400 And they even though they had five subsidiaries, bed Beth 0:14:16.480 --> 0:14:19.000 and Beyond like the core business still accounted for the 0:14:19.080 --> 0:14:22.480 majority of their revenue. Yeah, over their stores where Bed 0:14:22.520 --> 0:14:26.320 Bath and Beyond stores because these other acquisitions were small 0:14:26.440 --> 0:14:28.960 when they got them, and more regional, yeah, like the 0:14:29.280 --> 0:14:31.560 like the New Jersey's chains and stuff like that, so 0:14:31.680 --> 0:14:33.680 they grew them, but they also used them to grow 0:14:34.320 --> 0:14:37.560 their business and expand their offerings. This is also when 0:14:37.640 --> 0:14:41.800 we started seeing I mean, obviously the companies were about 0:14:41.840 --> 0:14:43.240 to mention have been around for a while, but we 0:14:43.320 --> 0:14:48.800 started seeing companies like Target and Walmart and Amazon compete 0:14:48.880 --> 0:14:53.000 more fiercely in the same space as Bed Bath and Beyond. Yeah. Yeah. 0:14:53.520 --> 0:14:55.520 But despite that, in two thousand and thirteen, they were 0:14:55.600 --> 0:14:59.080 up to eleven point five billion dollars in sales, and 0:14:59.240 --> 0:15:02.240 it looked like they might actually be able to take 0:15:02.240 --> 0:15:04.760 a stand against all of these extra big box stores, 0:15:04.760 --> 0:15:07.120 which is what I'm going to call them, yeah, some 0:15:07.320 --> 0:15:11.040 of them being online big box stores. Yeah. Amazon. And 0:15:11.200 --> 0:15:13.440 part of it was attributed to the fact that the 0:15:13.480 --> 0:15:16.280 company was very fiscally conservative up to this point other 0:15:16.360 --> 0:15:22.920 than buying the the subsidiaries, so they had very little debt. 0:15:23.080 --> 0:15:26.640 And even when they were acquiring these other companies, they 0:15:26.720 --> 0:15:28.240 did it at a time where they said that it 0:15:28.400 --> 0:15:30.880 wasn't going to affect their bottom line for that year. 0:15:31.160 --> 0:15:33.120 Whether or not that's actually the case, we don't know, 0:15:33.240 --> 0:15:35.680 because they don't really break out these other companies and 0:15:35.720 --> 0:15:38.680 their financials. They lump them all together. Oh yeah, that's 0:15:38.720 --> 0:15:41.640 one of the issues that we will revisit as well, 0:15:41.760 --> 0:15:45.840 is that when it came to financial reporting, they weren't 0:15:46.000 --> 0:15:48.880 They wouldn't break this down by here's how much this 0:15:49.040 --> 0:15:52.800 particular subsidiary brought in, here's how much this subsidiary brought in, 0:15:53.080 --> 0:15:55.280 here's how much bed bath and Beyond brought in. They 0:15:55.320 --> 0:15:58.480 would group them all together, and so it made it 0:15:58.680 --> 0:16:01.720 very challenging to understand what parts of the company were 0:16:01.800 --> 0:16:05.440 doing well and which parts might not be doing So. Yeah, Now, 0:16:05.720 --> 0:16:08.760 another part they thought that was leading to their success 0:16:08.920 --> 0:16:11.680 was the longevity of their leadership. You know, the founders 0:16:11.720 --> 0:16:13.640 are still on the board. They had a very long 0:16:13.720 --> 0:16:16.600 standing CEO and a very long standing president and just 0:16:16.960 --> 0:16:19.280 and you know, we've tosked so many times about how 0:16:19.760 --> 0:16:22.920 you would have like a rapid change in executive leadership 0:16:23.400 --> 0:16:26.520 and that could result in doom for the company. So, 0:16:27.560 --> 0:16:31.400 you know, you would think that having the same leaders 0:16:31.440 --> 0:16:34.360 in place for a long time could really help guide 0:16:34.360 --> 0:16:36.280 a company. But here's the here's the thing is that 0:16:36.920 --> 0:16:40.320 sometimes stuff changes and you need to have leadership that 0:16:40.440 --> 0:16:44.200 can adapt to change. And if you're comfortable, you may 0:16:44.240 --> 0:16:46.440 not notice that change. And if you're a company that 0:16:46.560 --> 0:16:49.840 makes acquisitions in order to bail out the children of founders, 0:16:50.480 --> 0:16:56.040 which would happen again, that's that's uh, it can be 0:16:56.080 --> 0:16:58.840 an issue, but we'll we'll, we'll get there. So Ben 0:16:58.880 --> 0:17:02.760 Beth and Bon also has aggressive buyers who who really 0:17:05.119 --> 0:17:07.159 I would say they could squeeze blood from a stone, 0:17:07.240 --> 0:17:11.480 like they're really good on getting distributors to agree to 0:17:11.600 --> 0:17:14.159 really good sales prices and things like that. So so 0:17:14.280 --> 0:17:17.480 they were going out to to the providers of whatever, 0:17:17.600 --> 0:17:21.320 like the companies that are making these products and being 0:17:21.359 --> 0:17:24.080 able to get them at a really good price, and 0:17:24.160 --> 0:17:26.359 then of course mark it up to sail cell to 0:17:26.440 --> 0:17:28.920 the final customer. And they made a lot of demands 0:17:29.000 --> 0:17:33.080 to those manufacturers and distributors. But they those manufacturers and 0:17:33.119 --> 0:17:36.720 distributors also got a lot of of you know, push 0:17:36.800 --> 0:17:39.000 for their products, so it was a given take they 0:17:39.000 --> 0:17:40.600 were willing to meet a lot of those demands. They 0:17:40.640 --> 0:17:44.639 also looked from some reports that I read for instead 0:17:44.640 --> 0:17:48.000 of looking for prime retail space. They looked for affordable 0:17:48.040 --> 0:17:52.480 retail space. Now, whether it was affordable enough or not, 0:17:53.359 --> 0:17:56.080 I don't know, But in other words, they were looking 0:17:56.160 --> 0:17:59.080 for things like they were trying to balance out, Uh, 0:17:59.720 --> 0:18:02.600 does this space makes sense? Like if we paid this 0:18:02.800 --> 0:18:05.359 premium amount for this space, we might be in a 0:18:05.440 --> 0:18:07.680 much more visible spot, but we may not see a 0:18:07.720 --> 0:18:10.920 good return on that investment as opposed to let's go, 0:18:11.320 --> 0:18:14.000 you know, maybe three blocks over to a spot that's 0:18:14.040 --> 0:18:18.360 not considered quite as as valuable, but at the same 0:18:18.480 --> 0:18:22.159 time will make a better return. Yeah, I get it. 0:18:22.280 --> 0:18:25.119 And then, of course there's one other component we have 0:18:25.400 --> 0:18:28.040 to talk about, because anyone who's ever shopped at bed 0:18:28.119 --> 0:18:32.000 Bath and Beyond and put their email registered their email 0:18:32.040 --> 0:18:35.760 with bed Bath and Beyond knows about the coupons. Yes, 0:18:36.160 --> 0:18:39.840 these these coupons got a lot of people into the stores. 0:18:40.240 --> 0:18:44.040 I know, I'm married to one of them. I mean, 0:18:44.359 --> 0:18:46.600 I usually go, oh, bead Bath and Beyond coupon. I'm 0:18:46.600 --> 0:18:48.160 going to go to Bad Bath and Beyond. I'm sure 0:18:48.200 --> 0:18:50.080 there's something I need or want, and then I forget 0:18:50.119 --> 0:18:52.119 the coupon at home, and then I'm not signed up 0:18:52.119 --> 0:18:54.680 for the electronic coupons. Well I am now, but I wasn't, 0:18:54.760 --> 0:18:57.120 so I go in and I wouldn't actually have a coupon. Regardless, 0:18:57.119 --> 0:19:00.000 these coupons would give you like five off your entire order, 0:19:00.960 --> 0:19:03.880 your most expensive item, some really good deals. They were 0:19:04.119 --> 0:19:08.280 very lenient with the expiration dates yes, extremely sick yes, 0:19:08.480 --> 0:19:11.080 and also very lenient with a return policy. You could 0:19:11.080 --> 0:19:14.680 return an item to anywhere used or new, um, well, 0:19:14.800 --> 0:19:17.000 any bed, Beth and beyond. Like you couldn't return to 0:19:17.119 --> 0:19:20.120 Target exactly. You walk into a game stop and say, 0:19:20.720 --> 0:19:23.119 I want I want some money back for this toilet 0:19:23.160 --> 0:19:25.760 brush I bought. Yeah, And they thought that they had 0:19:26.040 --> 0:19:28.520 this coupon plan figured out. Well, they were going to 0:19:29.119 --> 0:19:31.600 factor the discounts into their pricing, so they could do 0:19:31.720 --> 0:19:33.880 pricing that was a little bit higher because people would 0:19:33.880 --> 0:19:36.240 be using the coupon to bring it back down yeah 0:19:36.440 --> 0:19:39.119 yeah um. And then they would also weigh that with 0:19:39.280 --> 0:19:40.680 the amount of people that they thought were going to 0:19:40.720 --> 0:19:42.480 pay full price for items, like me, when I'd go 0:19:42.560 --> 0:19:44.680 in because I forgot my coupon, but I still wanted 0:19:45.800 --> 0:19:48.960 the mega coupon ers who have that stack ready to 0:19:49.000 --> 0:19:52.119 get at any moment, because they would also stack coupons 0:19:52.320 --> 0:19:55.400 for a while. Yeah. Yeah, if you ever saw any 0:19:55.440 --> 0:19:58.280 of those shows about like the crazy coupon ing type 0:19:58.359 --> 0:20:00.359 stuff like this is one of the company nis that 0:20:00.560 --> 0:20:04.560 was a frequent like it would frequently pop up on 0:20:04.640 --> 0:20:07.000 that sort of thing. Yes, Um, but I think I 0:20:07.080 --> 0:20:10.560 think we've talked too much about coupons, so we'll move on. 0:20:11.240 --> 0:20:17.840 So we get over to this this part where Bed 0:20:17.880 --> 0:20:20.040 Bath and Beyond has been doing really well, and they've been, 0:20:20.400 --> 0:20:23.919 you know, trying to attribute that success to several different things. 0:20:24.000 --> 0:20:26.800 But we're now getting to the point where where we're 0:20:26.800 --> 0:20:29.159 about to have the tilt right. Yes. Yeah, So in 0:20:29.200 --> 0:20:31.960 two thousand fifteen, they planned to open thirty more stores 0:20:32.000 --> 0:20:34.159 across all their properties, so not just bed Bath and 0:20:34.200 --> 0:20:37.840 Beyond stores. Um, and they made a bunch more acquisitions. 0:20:37.960 --> 0:20:40.520 So they bought of a kind in two thousand and fifteen, 0:20:41.200 --> 0:20:44.560 one kings Lane and personalization Mall in two thousand sixteen. 0:20:44.880 --> 0:20:47.480 One kings Lane. That's the one that's in Kingsman right that. 0:20:49.200 --> 0:20:53.920 You know, I can't disprove it because I don't know 0:20:54.000 --> 0:20:59.320 what one kings Lane self. Call me out, John. I'll 0:20:59.320 --> 0:21:01.920 like to think of that as the store where all 0:21:02.040 --> 0:21:04.720 the Kingsman stuff takes place. I know it's not, but 0:21:05.119 --> 0:21:07.960 just anyway and personalization all was like this little niche 0:21:08.000 --> 0:21:11.000 online things. They're like, Okay, we're gonna we're gonna, yeah, 0:21:11.000 --> 0:21:13.719 we're gonna dip our toe in the online yeah. Um. 0:21:13.800 --> 0:21:16.280 And then they bought cheft Central and the Chorus in 0:21:16.320 --> 0:21:20.320 two thousands seventeen, and a lot of these were nitche 0:21:20.359 --> 0:21:23.840 acquisitions and or helping them get in the online market 0:21:23.880 --> 0:21:26.399 because they had a website. But it you know, even recently, 0:21:26.480 --> 0:21:31.200 it's not super current. Yeah it was. It definitely wasn't 0:21:31.200 --> 0:21:34.240 following the best practices that you would see another online retailers. 0:21:34.640 --> 0:21:38.400 And one of those companies that you just listed, aerial Um, 0:21:39.400 --> 0:21:42.920 I don't think was like a strategic acquisition, wasn't. No, 0:21:43.400 --> 0:21:50.840 it was another quote unquote bailout. Yes, yeah, Warren Eisenberg 0:21:50.960 --> 0:21:54.600 this time. So Feinstein had already had his turn at 0:21:54.640 --> 0:21:58.800 bailing out a kid with the acquisition that we had 0:21:58.840 --> 0:22:02.879 mentioned previously, and chef Central was another one. Now this 0:22:03.119 --> 0:22:07.040 the other founder, Warren Eisenberg's kid. And this is where 0:22:07.080 --> 0:22:09.640 I why I said it pays to be the kid 0:22:09.720 --> 0:22:12.000 of those two founders, because if you if you have 0:22:12.160 --> 0:22:16.440 a business concern and things go belly up. You know, 0:22:17.080 --> 0:22:20.280 maybe Daddy'll run around and help help put things right 0:22:20.320 --> 0:22:24.639 again by spending millions of dollars. It most more like 0:22:24.920 --> 0:22:29.280 millions of dollars, but I mean, come on, still, it's 0:22:29.280 --> 0:22:30.760 still a lot. It's more money than I have. But 0:22:31.200 --> 0:22:33.680 if I fall into major debt, I can't expect my 0:22:33.800 --> 0:22:36.760 parents to rush it and then bail me out. I mean, 0:22:36.880 --> 0:22:38.520 my parents love me, but I'm not going to put 0:22:38.560 --> 0:22:42.280 them in that position. Now. The problem is Chef Central 0:22:43.240 --> 0:22:46.520 is that it had a lot of competing items with 0:22:46.600 --> 0:22:48.480