Bed Bath & Beyond’s Executive Chairman Marcus Lemonis announced on Wednesday that the company won’t open or operate retail stores in California, saying the decision “isn’t about politics – it’s about reality.”
Lemonis said in a statement posted on X that the decision was driven by the fact that the company wouldn’t be able to sustain operations in the state due to higher taxes, higher fees and higher wages coupled with “endless regulations that strangle growth.”
“California has created one of the most overregulated, expensive, and risky environments for businesses in America,” Lemonis said, noting that the state’s policies created a system “that makes it harder to employ people, harder to keep doors open, and harder to deliver value to customers.”
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Lemonis said the state’s budget surpluses come at the expense of “ordinary citizens who are paying too much and businesses who are squeezed until they break.”
Lemonis said the company won’t participate in a system that he says undermines both its customers and shareholders. But the company isn’t alienating its California customers. Instead, Lemonis said the company is investing in a strategy that will enable Californians to get products from BedBathandBeyond.com that will be delivered between 24 and 48 hours. In many cases, same-day service will be offered, Lemonis said, noting that it will help the company avoid the “inflated costs created by an unsustainable model.”
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This comes as the ailing company fights its way back to relevance after it collapsed in 2023 from mounting debt and several failed turnaround strategies. Under its parent company, renamed from Beyond Inc. to Bed Bath & Beyond this week, the retailer is returning to brick-and-mortar shops with the first Bed Bath & Beyond Home store opening in Nashville earlier this month.
The company is planning to open 300 shops nationwide over the next two years.
“At some point, some business needs to take a stand and remind the state of California that while they keep reminding us that they’re the fourth-largest economy in the world, that’s going to dissipate over time,” Lemonis told “The Big Money Show” host Brian Brenberg.
Lemonis pushed back against criticism that he doesn’t want to pay workers, saying his company already pays well and aims to pay more. His issue is how the government dictates how businesses are run.
“We don’t want the government telling us how to run our business,” he told Brenberg. “And to do business in California, quite frankly, for my shareholders and my customers, I don’t think we can deliver a good product and make a profit, which is the idea behind business.”
In 2023, the original Bed Bath & Beyond filed for Chapter 11 bankruptcy and shuttered all physical stores after contending with issues such as “poor inventory management, slow adoption of online shopping trends and overreliance on coupon shopping,” according to Reuters.
Overstock.com purchased its brand name, domain and other intellectual property for $21.5 million in June 2023 and subsequently relaunched its website under the Bed Bath & Beyond banner by August. In November 2023, Overstock rebranded its corporate identity as Beyond, Inc. But Kirkland’s Inc. finalized a $25 million investment deal with Beyond, which is also the parent company of Overstock, Zulily and BuyBuy Baby, in February, enabling Kirkland’s to become the exclusive brick-and-mortar operator and licensee for new, smaller-format “neighborhood” Bed Bath & Beyond locations nationwide.
Earlier this week, Lemonis said the company changed its corporate name to Bed Bath & Beyond, Inc. and its common stock will begin trading under the ticker symbol BBBY on the New York Stock Exchange effective Aug. 29 as it seeks to highlight what he says are the “most valuable pieces of intellectual property that investors and consumers know today.”
The company’s goal is to grow the Bed Bath & Beyond brand while simultaneously building Overstock.com “back to a billion-dollar nameplate” and maximizing value within its blockchain assets tZERO and GrainChain.
Lemonis’ series “The Fixer” airs Tuesdays at 8 p.m. ET on the FOX Business Network.
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