Bed Bath and Beyond

Bed Bath& Beyond‘s plan for growth

Bed Bath & Beyond the power retailer of domestics and home furnishings, has annual sales of $7billion and a net income of $562million. The firm profitability can be explained by its increasing gross profit margins at the same time it decreases selling, general and administrative expenses (SG&A) as a percent of sales. BB&B is able to increase its gross profit margins due to its excellent atmosphere, wide assortments, and a deep variety within most merchandise lines. Its control overall SG&A expenses is partly due to the outsourcing of its distribution centers to third party.

BB&B has opened hundreds of stores over the last few years, ranging in size from $3,000 to $8,000 square feet. Due to it uses a flexible real estate strategy, BB&B is able to situate in a variety of locations. BB&B is now being allowed into large shopping centers. In the pats , department store anchor tenants blocked BB&B . In 2004, BB&B had about stores with a total of 20.5millin square feet of store space. By the end of 2008, these numbers had expanded to nearly $1,000 stores with 31million square feet of store space. Its long-term goal is to operate 1,300 stores. In addition, BB&B plans to remodel and expand many existing stores.

In 2003, BB&B purchased Christmas Tree Shops, ac chain of stores specializing in giftware and household items. Although the Christmas Tree Chops’ name suggests that it concentrates on Christmas merchandise, the chain is positioned against Pier 1. In March 2007, BB&B acquired “buybuyBABY”, a retailer specializing in infant and toddler merchandize. In December 2007, BB&B opened its first foreign BB&B in Ontario, Canada. In May 2008, BB&B purchased a 50% equity interest in Home & More, a Mexican home goods retailer that operated two stores in Mexico City.

BB&B management (as well as many retail analysts) attributes the chain’s strong sales performance to its...