Friday, September 30, 2022

Why Does Our Firm Exist? Lesson from the Collapse of Bed, Bath, and Beyond

Source: CNBC

Phil Wahba has written a detailed and highly informative account of the collapse of Bed Bath and Beyond for Fortune.  He points out that the retailer will generate about half as much revenue this year as they did just four years ago.  Tragically, CFO Gustavo Arnal took his own life earlier this month, in part due to the stress of the situation at the retailer.

Wahba chronicles the many reasons for the declining revenue and huge losses at the retailer.  They include executive turnover, supply chain systems failures and deficiencies, and a poorly designed effort to promote new store brands while reducing the reliance on coupons and discounts.   

Wahba closes the article by writing, "During the August investor presentation, a Baird analyst said to Gove (interim CEO): 'Just trying to understand how you really differentiate the business by selling product that is widely available at other retailers.' That is exactly what Gove has to figure out, and fast."

At another point in the article, Wahba writes, "Bed Bath & Beyond has to figure out why it needs to exist in consumers’ eyes."  Indeed, that is the ultimate question for any company.  Why do we exist? What value do we bring to the table for our customers that others cannot provide?  If you can't answer that question, you don't have a viable strategy at all.   Every CEO should be asking themselves that question, but especially if you are leading a brick-and-mortar retailer these days. 

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