Question

Bed Bath & Beyond is primarily a bricks and mortar company. Most of its products are available online through Amazon.  The company was late to e-commerce and has been playing catch up, investing in upgrading its online presence, introducing mobile apps and rolling out a new point-of-sale system.   On the plus side, sales from digital channels have been increasing, but conversely, same-store sales at the brick and mortar stores have been flat. That’s a problem because online sales have lower margins and the shift of sales to the internet cuts into company’s ability to lever the fixed costs of running stores.

Is there still a place for brick and mortar stores whose products are readily available online?

Has Bed Bath & Beyond been successful in competing with companies such as Amazon?

Is Bed Bath & Beyond likely to be forced into filing for bankruptcy? Explain.

Answer 1

Brick and mortar trades are becoming outdated. Currently we have seen a few companies getting devastated by E-Commerce others playing catch-up, so they do not go insolvent. We also must take in contemplation that these brick and mortar business will have a drawback for the reason that they must spread overhead cost and not all the stores will make millions in revenues.

A place for brick and mortar businesses are vanishing; it’s a generational gap, people around 30’s will choose going to the place testing, seeing and conversation to the expert about certain item they will like to buy. However, in the last weeks I was not having free time, so I decided to buy everything online. For example, groceries I save time and only spend 20 minutes at the computer buying groceries, then go to Walmart make a phone call and they put everything in the truck. It was wonderful, we also have car services where you can buy a brand-new car and they ship it to your house. I see that in around 20-25 years we will be in a world where everything will be reachable via internet and less brick and mortar companies will exist.

Bed bath and yonder have been struggling fiscal year 2017 their stock was around $3.07(net earnings per share); fiscal year 2018 will be around low-to-mid $2.00 yet, the price has been around $1.87 so far. Agreeing to “FactSet”, sales drop by .06% together with their online sales which was there strong sales growth. Bed bath and beyond has not been successful contending with companies such as Amazon because their shares specify sales are dipping and that’s including the “strong sales” via internet. I do not see them filing bankruptcy anytime soon. They might close a few stores soon if sales keep dropping. Q4 shares plunged after they missed their forecast which point out why they are not contending with Amazon and why in a term of 5 year they might closed a few businesses of they don’t turn the ship around.