00:00:00
well one of the big stories in retail
00:00:02
recently was the dissolution of Bed Bath
00:00:05
and Beyond obviously a retailer that was
00:00:08
well known for its uh locations across
00:00:11
the country but the merger that took
00:00:13
place with Bed Bath and Beyond and
00:00:15
overstock.com has brought forward a new
00:00:18
company one that will be focused a lot
00:00:20
on e-commerce pleasure to be joined by
00:00:23
Jonathan Johnson who is the CEO of that
00:00:26
new Bed Bath and Beyond Jonathan great
00:00:28
to have you with us today thanks for a
00:00:30
few moments
00:00:31
thank you it's a pleasure to be with you
00:00:33
man thank you all right so
00:00:35
congratulations and uh you've been going
00:00:37
at this now for a few weeks how's
00:00:39
everything going with the with the new
00:00:41
operations
00:00:43
you know so far we're really encouraged
00:00:45
we went uh live in Canada
00:00:48
about a month and a half ago
00:00:50
kind of doing a test up there because
00:00:52
our business is much smaller uh so far
00:00:56
uh there's more direct traffic to the
00:00:59
site or return on ad spend for our
00:01:02
search engine marketing is up and once
00:01:05
customers are on the site they're
00:01:06
converting at a higher rate which means
00:01:08
they're buying more product
00:01:09
we've all been live in the U.S for about
00:01:12
10 days but we've seen nice initial
00:01:16
results take us through that that
00:01:18
decision to start up in Canada what was
00:01:20
beside what was behind that
00:01:22
well there were two things primarily uh
00:01:27
we wanted to launch and use it kind of
00:01:30
as a beta test see what wrinkles there
00:01:33
were as we switched from one brand to
00:01:36
the other a lot of technological effort
00:01:38
went into that I wanted to make sure we
00:01:41
hadn't made any mistakes uh the second
00:01:44
was uh when we purchased the name and
00:01:48
the other intellectual property out of
00:01:50
bankruptcy uh one of the conditions was
00:01:54
that in the states they had another
00:01:56
month or so
00:01:58
uh the trustee wanted to run the stores
00:02:01
uh their sales in the stores for a month
00:02:03
and we did not want any confusion
00:02:06
between in-store experience which we
00:02:09
weren't controlling meaning brick and
00:02:11
mortar experience in the website
00:02:13
experience which would be the future of
00:02:16
the new Bed Bath and Beyond
00:02:18
so the decision to go more so with the
00:02:21
Bed Bath and Beyond brand over the
00:02:23
Overstock brand take us into what went
00:02:26
behind that
00:02:27
oh
00:02:28
you know an Overstock started 24 years
00:02:31
ago we were a liquidator in the name
00:02:34
described what we did but for over two
00:02:37
decades we have not been a liquidator we
00:02:40
were first a general retailer and over
00:02:43
the last two to three years we've become
00:02:45
focused on home furnishings and
00:02:48
Furniture we're really a home company
00:02:50
and yet
00:02:52
our name was creating headwind for us
00:02:56
customers viewed us as a liquidator no
00:02:59
matter how much we tried to associate
00:03:01
our name with home suppliers units is a
00:03:05
liquidator so we've long looked for a
00:03:09
brand that was synonymous with home we
00:03:13
liked Bed Bath and Beyond for some years
00:03:15
we've kind of looked at it we like its
00:03:18
brand we like its customer base we did
00:03:22
not like its business model that was in
00:03:25
a lot of debt
00:03:27
and we didn't like the brick and mortar
00:03:29
aspect we're an online retailer so when
00:03:33
the things we liked about it the
00:03:35
customers the intellectual property and
00:03:37
the brand became available in bankruptcy
00:03:40
without our having to purchase the
00:03:42
things we didn't like it just seemed
00:03:45
like a natural fit in the right time to
00:03:48
do a significant rebranding for the
00:03:50
company so how much will the Overstock
00:03:53
logo and name still end up being part of
00:03:57
the business and I say that because I
00:03:58
wasn't sure until I went on my
00:04:00
smartphone and pulled up my Bed Bath and
00:04:03
Beyond app and you still had the
00:04:05
Overstock logo on there
00:04:08
yeah the law goes on there kind of in
00:04:10
the lower left hand corner on the app it
00:04:14
is on the website not very prominently
00:04:16
but there
00:04:17
during this initial transition period we
00:04:20
want our Legacy Overstock customers to
00:04:23
know they found the right place is they
00:04:25
type in overstock.com and get redirected
00:04:29
to the bedbathandbeyond.com site we want
00:04:32
them to know they're at the right place
00:04:34
we do intend relatively quickly to
00:04:38
Sunset the Overstock logo
00:04:41
the name some point in the relatively
00:04:45
near future will change the name of the
00:04:48
company from Overstock to something else
00:04:51
We are Becoming Bed Bath and Beyond we
00:04:55
think it's a well-known well-trusted
00:04:57
name that's synonymous with what we do
00:05:00
and so we want to get there quickly
00:05:02
without alienating
00:05:05
are loyal what I'll call Legacy
00:05:07
Overstock customers is we transition
00:05:10
them to the new Bed Bath and Beyond
00:05:12
customer are there components of the Bed
00:05:15
Bath and Beyond business that that still
00:05:18
are viable and you think are are will be
00:05:21
beneficial to bring into the operations
00:05:23
now as the new company
00:05:25
no question you know Bed Bath and Beyond
00:05:27
had a lot of things so we liked one will
00:05:31
get deeper in our product offerings and
00:05:33
bed kitchen and bath products we'll also
00:05:37
expand the name brand products that uh
00:05:41
that that Bed Bath and Beyond and
00:05:43
Overstock customers want and then there
00:05:47
are things that bed bath is historically
00:05:49
done well
00:05:50
like Registries that Overstock is not
00:05:54
done well then we will incorporate you
00:05:57
know I was self-aware enough as the CEO
00:05:59
of Overstock to know that no one not
00:06:04
even my own children would put
00:06:06
registered at overstock.com on their
00:06:09
wedding invitations but we see
00:06:11
registered at Bed Bath and Beyond all
00:06:13
the time so you can expect our
00:06:16
Registries business to do better bed
00:06:19
bath was also very good at significant
00:06:21
life events whether that was weddings or
00:06:24
births or moving off to school or into
00:06:27
your first apartment they had a very
00:06:30
good back to dorm in our apartment
00:06:32
business that we can think we can
00:06:34
capitalize on how has this process
00:06:39
impacted your thought process about
00:06:41
being the CEO of the company has
00:06:44
anything changed or tweaked along the
00:06:46
way
00:06:47
well I hope things are always changing
00:06:49
you know one of overstocks
00:06:51
qualities that we try and uh nurture is
00:06:56
becoming we want the company our teams
00:06:59
and each individual to become better uh
00:07:03
part of what I think it's changed for me
00:07:06
is just the focus on getting more name
00:07:09
brands on the site uh the focus on
00:07:12
reaching out to suppliers who
00:07:15
historically haven't been willing to do
00:07:18
business or at least offer their full
00:07:20
catalog of business to Overstock but now
00:07:24
we're willing to offer that to Bed Bath
00:07:26
and Beyond it's also created a real
00:07:30
level of excitement within the company
00:07:33
you know for years
00:07:36
we would have company-wide stand-ups and
00:07:38
invariably someone would ask when are we
00:07:41
going to change our name away from
00:07:42
Overstock I think this shows excuse me
00:07:46
that
00:07:47
waiting for the right time and being
00:07:50
patient uh you can find it often you can
00:07:54
find a solution that didn't appear
00:07:56
feasible at one point that then does
00:08:00
become feasible so it's it's it's
00:08:05
I think trying to augment the excitement
00:08:07
which is in the company and make sure
00:08:09
that doesn't dissipate is the deal gets
00:08:12
further away but continues to grow uh as
00:08:15
we encourage new customers to come to
00:08:18
the site I think what we've all gone
00:08:20
through over the last three to four
00:08:22
years has been just obviously it's been
00:08:24
a very hard time but I think it's also
00:08:27
been a unique one to be able to learn
00:08:29
from
00:08:30
as you look back at that time how have
00:08:32
you viewed what has played out for you
00:08:36
and for Overstock and to a degree I
00:08:38
guess for Bed Bath and Beyond as well uh
00:08:40
during the time of the pandemic
00:08:42
yeah you know uh I became CEO at
00:08:46
Overstock uh about six eight months
00:08:49
before the pandemic began and Overstock
00:08:52
was really in a tough financial position
00:08:54
and we worked to bolster that but the
00:08:58
pandemic was good for our business we
00:09:01
were home and Home Furnishings and
00:09:03
people were stuck at home and we were
00:09:05
online and people couldn't Shop Brick
00:09:07
and Mortar so it was very good for our
00:09:10
business but hard for our employees and
00:09:13
as much as I was a chief executive
00:09:16
officer during the height of the
00:09:19
pandemic I was just as much but I would
00:09:22
sometimes refer to as kind of a chief
00:09:24
pastoral officer there was a calming
00:09:27
they were trying to over communicate uh
00:09:30
and and you know talk about personal
00:09:34
concerns that employees might be having
00:09:36
and the pandemic was a scary time post
00:09:39
pandemic
00:09:41
uh I would say our industry the Home
00:09:45
Furnishings industry the home products
00:09:47
industry has been in a recession and
00:09:50
while while uh the general economy may
00:09:54
have avoided a recession and we may see
00:09:57
a soft Landing
00:09:59
um as people
00:10:00
got back to purchasing services and
00:10:04
experiential things this business was in
00:10:06
a recession and so it was really
00:10:09
important for us at Overstock to make
00:10:11
sure that we minded the bottom line and
00:10:14
we just recorded our 13th consecutive
00:10:17
quarter of positive adjusted even uh
00:10:21
minding our balance sheet and keeping it
00:10:24
strong and healthy allowed us to play
00:10:26
offense in what's really kind of a
00:10:28
defensive time for the industry make
00:10:31
this acquisition of the Bed Bath and
00:10:33
Beyond brand and other intellectual
00:10:34
property and have the wherewithal to
00:10:37
Market in a more meaningful way during
00:10:40
this Rebrand we will and we've let the
00:10:43
street know we're going to deviate on
00:10:45
purpose for a short time of watching the
00:10:48
bottom line so that we can grow the Top
00:10:50
Line we think it's a unique opportunity
00:10:53
to to find customers and bring them to
00:10:57
the new Bed Bath and Beyond that won't
00:11:00
exist you know that opportunity won't
00:11:02
exist forever so it's good to have a
00:11:04
balance sheet it lets us work on that
00:11:07
now well I I think there's something to
00:11:09
be said especially in your sector about
00:11:11
the name of the products that you're
00:11:14
bringing in the trust that a lot of
00:11:16
consumers have in those names as you
00:11:19
move forward
00:11:20
yeah you know we we have found in these
00:11:24
early days of the transition that as I
00:11:27
mentioned our return on ad spend for
00:11:29
search engine marketing is up and I
00:11:32
think that's because when someone's
00:11:34
searching for
00:11:35
linens on Google or elsewhere online and
00:11:39
they see a bed bath search result come
00:11:43
up it's a namely known trust and they
00:11:46
know they're going to get a name brand
00:11:48
quality product when they used to see an
00:11:51
Overstock
00:11:52
product shop up pop-up we had to
00:11:55
convince them that it wasn't
00:11:57
liquidation and it wasn't last year's
00:12:00
goods and so I think having a solid
00:12:03
brand as a retailer and adding to that
00:12:06
name brand products uh you know the
00:12:11
Calphalon uh the the Keurigs the
00:12:14
cuisinarts uh that's what customers want
00:12:18
and I think one of the things that bed
00:12:20
bath ran into trouble before bankruptcy
00:12:23
was moving away from name brands into
00:12:26
private label and my view is that
00:12:29
retailers should be meeting customer
00:12:31
demands not trying to change customer
00:12:34
wants and I think that's what the old
00:12:37
bed bath kind of ran into that problem
00:12:39
we intend to solve problems for our
00:12:42
customers give them what they want at
00:12:44
prices that they just love so Bed Bath
00:12:47
and Beyond really I think if you look at
00:12:50
the company before the the uh the merger
00:12:53
I think it's safe to say that people
00:12:56
would view it as a a company that was
00:13:00
based on retail more so you know the
00:13:02
bricks and mortar more so than
00:13:04
e-commerce how then now do you take that
00:13:09
customer base that of Bed Bath and
00:13:12
Beyond that knew it as bricks and mortar
00:13:15
and bring them into the fold with the
00:13:17
new company uh with the combined element
00:13:19
with Overstock yeah that's that's a
00:13:22
great question and we did a fair amount
00:13:24
of research on that before
00:13:26
uh you know engaging in this transaction
00:13:28
bed bath Business Online was significant
00:13:32
it was over a billion dollars in the
00:13:33
trailing 12 months and so there are
00:13:36
customers that went there digitally I
00:13:39
think the pandemic also got most
00:13:42
consumers
00:13:43
more comfortable shopping online for
00:13:45
furniture and Home Goods than they had
00:13:47
been in the past and that penetration
00:13:49
from brick and mortar to online
00:13:52
continues to grow I think for us the
00:13:55
trick will be reaching out to that Bed
00:13:58
Bath and Beyond customer who love the
00:14:00
big blue coupon you know if your kitchen
00:14:02
is like mine and has what we
00:14:05
affectionately refer to as a junk drawer
00:14:07
in that drawer there will be likely uh
00:14:12
that big blue coupon that showed up in
00:14:15
the mail
00:14:16
for us it will be convincing uh
00:14:20
customers to download the Bed Bath and
00:14:23
Beyond ad that will be the best way for
00:14:26
them to find if you love the coupon
00:14:28
before you'll love the app today because
00:14:30
that's where the best deals the best
00:14:32
offers will continue to come and it
00:14:35
wasn't just a coupon it was several
00:14:38
coupons so how do you use I mean is
00:14:41
there a point down the road potential
00:14:43
actually where the actual idea of the
00:14:46
coupon goes away or do you kind of keep
00:14:48
that in the mix maybe not as as
00:14:51
prevalent or as you know as as common as
00:14:55
it was with the old company yeah so the
00:14:59
old Bed Bath and Beyond was a high low
00:15:00
retailer its highs were a little high
00:15:03
and thus it had you know a large
00:15:05
percentage of coupon
00:15:07
Overstock has always been a high low
00:15:10
retailer offering site sales and coupons
00:15:12
but our prices are sharper and so our
00:15:15
coupons aren't quite as large and I
00:15:19
think what
00:15:20
historic bed bath customers welcome
00:15:23
rewards customers will see is they'll
00:15:26
still have great deals through site
00:15:28
sales and coupons and coupons may not be
00:15:31
as big but the prices because they're
00:15:33
sharper will be better than they were
00:15:36
before and I think ultimately that's
00:15:39
what the customer wants they want the
00:15:41
best price they do like a call to action
00:15:44
and a site sale or a coupon or another
00:15:47
promotion is a call to action and we try
00:15:50
and really balance sharp pricing without
00:15:53
being an everyday low price leader being
00:15:55
in this high low retailer with
00:15:58
the right promotions as a call to action
00:16:01
let me finish up with this because
00:16:04
you've mentioned it a couple of times
00:16:06
but the element of brand uh is really
00:16:10
kind of key to this entire process and I
00:16:13
think it it feels like correct me if I'm
00:16:15
wrong that I've had more companies I've
00:16:18
seen more companies talk about their
00:16:21
brand more so in the last five years
00:16:24
than maybe we saw going back a couple of
00:16:26
days decades do you see that as well
00:16:30
I I do and I think we see it two ways so
00:16:33
Overstock has always had a very good
00:16:35
business model one that knows how to run
00:16:39
an asset like business and make money
00:16:42
well we have this anchor of a brand that
00:16:46
didn't accurately describe who we had
00:16:49
become
00:16:49
Bed Bath and Beyond had a well-known
00:16:52
well-trusted I would even say iconic
00:16:55
brand but with a business model that
00:16:57
over time had become its boat anchor and
00:17:01
you know it had heard a lot of debt what
00:17:04
we've done is we've ridden each of their
00:17:09
anchors we're taking a solid business
00:17:12
model that overstocks had attaching it
00:17:15
to this well-known well-trusted brand
00:17:18
and we think that's a boat to keep this
00:17:21
metaphor going they can sail sleekly
00:17:23
anchor free into the future and so I
00:17:27
think guarding that brand nurturing that
00:17:30
Bed Bath and Beyond brand and attaching
00:17:33
it to our what we think is a better
00:17:35
business model really takes us into a
00:17:38
bigger better Beyond than we've had
00:17:41
before
00:17:42
Jonathan great to talk with you thanks
00:17:44
for giving us a few moments all the best
00:17:46
as you continue to roll things out and
00:17:48
we will catch up with you again down the
00:17:49
road let's do it again Dan thanks so
00:17:52
much you got it Jonathan Johnson who is
00:17:54
the CEO of Bed Bath and Beyond
00:17:58
that was great thank you very much for
00:18:00
doing that greatly appreciate it yeah
00:18:02
and you're easy to talk
00:18:03
like it was two friends talking over
00:18:05
lunch not being
00:18:06
hit by a reporter that was awesome you
00:18:09
know that I I've had Executives tell me
00:18:12
that and that goes to my background uh
00:18:15
because before I got into business uh I
00:18:18
was in baseball and I I broadcast minor
00:18:22
league baseball for 13 years and so in
00:18:25
that job you have to be a Storyteller
00:18:27
and so oh yeah I
00:18:30
oh see that's
00:18:33
oh that's that's a great collector's
00:18:36
item that's fantastic yeah I I grew up
00:18:40
falling asleep on my green transistor
00:18:43
radio listen
00:18:45
boys have been Scully every night and
00:18:48
I'm a die-hard baseball fan so I think
00:18:51
that probably came through in the
00:18:52
interview there but when you were asking
00:18:54
questions it just felt natural well I I
00:18:57
appreciate that and and so let's do this
00:18:59
again uh at some point down the road
00:19:02
um because uh and it's funny why I asked
00:19:05
you again about brand is
00:19:08
um I had done an interview with the CEO
00:19:11
of uh the company that oversees the
00:19:15
Daytime Emmy Awards yesterday and I
00:19:17
talked to him about Brandon and I think
00:19:19
what we want to try and do in the next
00:19:21
couple of months is do a special on how
00:19:24
companies think about brand right now
00:19:26
and thinking about it in the wake of the
00:19:29
pandemic and where they're moving
00:19:30
forward so thank you for doing that you
00:19:32
know in a couple months we'll have we'll
00:19:34
have more data and you know kind of I
00:19:37
think our story I hope it's very
00:19:39
interesting then well let's Circle back
00:19:42
then and Kirsty you can kind of maybe
00:19:44
Loosely put that on your account founder
00:19:46
that Michelle or Sam will be in touch
00:19:48
with you uh to see if we can have
00:19:51
Jonathan back on in a couple of months
00:19:52
to do an interview about brand
00:19:55
last question Dan are you a Phillies fan
00:19:57
or did you absolutely excited by that no
00:20:00
hitter we saw that was phenomenal and
00:20:03
you know you've probably heard the
00:20:05
stories that it was only his second
00:20:07
start since he got traded it was his
00:20:09
first start at home in Philadelphia so
00:20:13
that was a great way to introduce
00:20:14
himself to the Philly Marketplace I read
00:20:18
the article on the Wall Street Journal
00:20:19
about his special shoes where he's
00:20:21
converted his skater Vans into cleats
00:20:23
yep yeah I think he might be the only
00:20:26
major Leaguer that has a set of Vans
00:20:28
cleats that uh he was on the field and
00:20:31
now he had to send them to the Hall of
00:20:33
Fame so he's got to get a new pair all
00:20:35
set that's awesome yeah have a great
00:20:38
weekend thanks Jonathan great to talk to
00:20:40
you Kirsty thanks again we will stay in
00:20:42
touch
