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