Bed Bath & Beyond plans 80 stores, 2.4 million sq. ft - Brief Article - Statistical Data Included

DSN Retailing Today, July 9, 2001

MORRISTOWN, N.J. -- Flexibility and consumer confidence have been the main factors behind Bed Bath and Beyond's continued store growth, and these factors will continue to carry it forward, said executives at the company's annual meeting in late June.

Evidence of this flexibility includes the rollout of smaller locations, some as small as 20,000 sq. ft., as part of the company's 80 new stores planned this year, which will add 2.4 million sq. ft. of space. This year, the average new store will be about 30,000 sq. ft. vs. 40,000 sq. ft. previously.

Although some analysts have raised concerns about the company's ability to sustain the current level of earnings per share growth with the smaller, stores, Steven Temares, president, coo and board member, said the company has anticipated the impact of the smaller stores and remains confident they will sustain the numbers that Bed Bath and Beyond has consistently posted.

The company also is "evolving" its distribution system going from direct store delivery to a system of out-sourced regional distributors.

On the merchandising front, Temares said concerns among observers about the impact of supply chain disruption from struggling mills has been overstated. While the company has set contingency plans, he noted the impact of any disruption would be felt by the company's competitors as well, and more so.

"We would be less affected than the rest," said Temares.

He added the company's e-commerce business is fulfilling its expectations, even though it is considered completely adjunct of the traditional store business.

Bed Bath & Beyond is among the most highly regarded retailers in the eyes of financial analysts who lately have declared the company not only is taking market share away from department stores--its traditional victim--but even from rival home specialists.

Commenting on Linens 'n Things, Dan Wewer, a Deutsche Banc Alex. Brown analyst, stated that Bed Bath & Beyond is increasingly consolidating its market position. "The gap in key financial metrics between the two is widening, not narrowing," he stated.

The only cloud on the horizon for Bed Bath & Beyond may be the failure of one or more major domestics suppliers. "Simply put, industry suppliers seem to be on the brink," noted Aram Rubinson, a UBS Warburg analyst.

Still, since that would create broad problems for everyone involved in domestics retailing, such a setback would likely be of a temporary nature. And, as often is pointed out, B3's advantage in the market has been in the "beyond" items, ranging from kitchen gadgets to furniture, which command higher margins than domestics anyway.

For the quarter ending June 2, sales increased 25.4% to $575.8 million, while earnings gained 28.4% to $30 million, or $0.10 a share, in line with analyst expectations. Comparable store sales grew by 4.4%.

For fiscal 2000, ended March 3, 2001, Bed Bath & Beyond surpassed $2 billion in sales for the first time, coming in at $2.4 billion vs. $1.86 billion in fiscal 2000. Earnings were $171.9 billion vs. $131.2 a year earlier, and comps grew by 5%.

COPYRIGHT 2001 Lebhar-Friedman, Inc.
COPYRIGHT 2001 Gale Group
 

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