Midvale, Utah — While Beyond Inc. won’t be opening up stores for its Bed, Bath & Beyond, Overstock and Zulily brands, there are still many options on the table as the company looks to bring itself back to profitability and enter into a growth mode.
In Beyond’s Q2 earnings call, Executive Chairman Marcus Lemonis emphasized several times that the company will remain “asset light,” which means the costs associated with leases, distribution facilities and stores that were part of the former Bed, Bath and Beyond model won’t be returning. But, he said, “you can expect in short order that we’ll put Bed, Bath & Beyond and Overstock back in the marketplace.”
He said there are multiple opportunities and multiple partners who are available to make that happen, and Beyond has begun those conversations.
Staying with the “asset light” theme, Lemonis said the company is focused on reducing debt and improving cash flow. He said growth will be the company’s middle name — not its first — until it reaches profitability. “Then I’ll put my foot on the gas,” he said.
Profitability is a mandate, he said. Part of achieving profitability was going to a flatter organizational structure, which Lemonis characterized as “more nimble” and headed by “subject matter experts.”
During the call, Lemonis, along with President David Nielsen and Adrianne Lee, chief financial and administrative officer, outlined several initiatives Beyond is working on, including:
- Developing a global loyalty program over the next 18 months that will include non-competing partners from areas such as finance and services.
- Ramping up the closeout, reverse logistics and liquidation business on Overstock.
- Relaunching Zulily on Sept. 10 with a focus on apparel and beauty.
- Rolling out a private-label program that will be sold not only through its three marketplaces but that will be available through other channels.
- Selling its headquarters building in Utah.
- Negotiating better terms with vendors and renegotiating carrier rates.
Nielsen said liquidation has historically been a strong traffic driver. By working with third-parties, Overstock can offer access to product but without undertaking the cost of moving the merchandise, which improves margins.
There are companies that need to deal with excess merchandise, noted Lemonis, “and we are the platform for them.” Companies may not want to “open their kimonos” and show their inventory mistakes, he said, making Overstock and Zulily safe spaces to handle the liquidation of product.
Although Beyond doesn’t provide guidance for future quarters, Lemonis did say the third quarter is always a little softer coming out of the summer, with expectations that business will be down 12% to 14%. However, he said, “we feel confident on bucking that trend,” and the goal for Q3 is to outperform the expected step down.
Business for Bed, Bath and Beyond in Q2, according to Nielsen, came from bedding, bath and décor, but it also saw activity in patio furniture and in crossover products, such as bedroom furniture. Consumers are becoming more comfortable shopping for the entire room, he said.
Overstock, which officially relaunched this month, is offering SKUs in its traditional categories such as rugs, furniture and patio and outdoor furnishings, said Nielsen, along with leaning into liquidation and closeouts.