You can add to the list of domestic merchandise retail store closures, as Bed Bath & Beyond Inc. (NASDAQ:BBBY) announced it is shutting down its Paseo del Norte location in Albuquerque, New Mexico. Bed Bath & Beyond closing a store again was expected, as the company, which has been plagued by weak in-store sales and declining profits, has been shuttering locations to boost its bottom line. Besides the New Mexico store closing, Bed Bath & Beyond’s profit decline has also caused the company to decide to shutter its Northeast Heights location in late February.
The site of the 28,000-square-foot Bed Bath & Beyond store closure is located at 8850 Holly Avenue NE in the Ventura Place shopping center. Ventura Place is also home to Trader Joe’s, Jinja, Boba Tea Company, and more.
A sign at the location of the retail store closure says the store is having a clearance event. Moreover, shoppers can continue to visit the company’s San Mateo, Cottonwood Commons, and Rio Rancho stores, which are, for now, still in business.
The Paseo del Norte store closure leaves the Albuquerque area, which has a population of around 560,000, with four Bed Bath & Beyond locations.
Bed Bath & Beyond Reported a 50% Decline in Profits in the 3rd Quarter
Bed Bath & Beyond’s third-quarter results, ended November 25, 2017, were recently reported. The company announced third-quarter revenue of $3.0 billion, essentially flat year-over-year. Comparable sales, meanwhile, slipped 0.3%.
Bed Bath & Beyond’s sales decline cause third-quarter net income to tumble 51.5% year-over-year to $61.3 million, or $0.44 per share. In the third quarter of 2016, the company reported net income of $126.4 million, or $0.85 per share.
While the retailer posted better-than-expected third quarter results, the company remains under pressure. As does its share price. In 2017, Bed Bath & Beyond’s share price fell more than 45%, closing the year out at $21.99. Over the first six trading days of 2018, Bed Bath & Beyond’s decline in profits has become more clear, as its share price has continued to give up ground.
Despite a difficult year of weak sales, store closures, and layoffs, Bed Bath & Beyond continue to reward shareholders. In the third quarter, the company declared a quarterly dividend of $0.15 per share. During the quarter, it also repurchased approximately $24.0 million of common stock under its existing $2.5 billion share repurchase program. There is still a $1.5-billion balance remaining in the program.
Bed Bath & Beyond Store Closings in 2017
Back in June, after the company reported weak first quarter results, company CEO Steven Temares, left the door open to more Bed Bath & Beyond store closings in 2017 store closures in 2017 and beyond, citing roughly 80 to 100 store leases that were coming up for renewal.
On a call to analysts, Temares said, “That’s a clear opportunity for us to say, ‘OK, over the next five years, what do we see happening? So if we had to predict, I’d say fewer stores.”
Which is exactly what we’re seeing. The Paseo del Norte location in Albuquerque, New Mexico is closing now that its lease is up. Bed Bath & Beyond announced closures in 2017, and chances are good that additional locations will be shut down in 2018.
Most recently, in October, Bed Bath & Beyond announced it was closing its store on Bechtle Avenue in Springfield, Ohio. As in the case of the Paseo del Norte closure, the company said the closure was a result of the lease term ending. The company also encouraged shoppers to visit local area Bed Bath & Beyond stores that are still open and to shop online.
In December, Bed Bath & Beyond announced it would be shuttering the doors at its Meridian Crossroads shopping center located in Meridian, Idaho. The closure caught many shoppers off guard.
“I did not know it until y’all told me!” shopper Dorothy Hendley said. “This is my favorite store in Meridian. I shop here all the time, and oh, I’m going to be so sad!”
Chances are good that the Bed Bath & Beyond’s stores shut down in 2017 will create momentum in 2018, leading to additional layoffs. This is a trend that is occurring across the entire U.S. retail landscape–an industry that employs one in every 10 Americans.
In 2017, major U.S. retailers closed a record 6,995 stores, with Sears Holdings Corp (NASDAQ:SHLD), J C Penney Company Inc (NYSE:JCP), and Macy’s Inc (NYSE:M) leading the way, announcing a combined 566 closures. The 6,955 store closures also represent a 229% increase over 2016. On top of that, retail bankruptcies were up 31%.
And by all accounts, 2018 will be a record year for store closures. Year-to-date 2018, the number of U.S. store closure announcements stands at 1,446. That’s just the beginning of the retail carnage expected in 2018. It is estimated that more than 12,000 stores will close in 2018.
Chains likely to file for bankruptcy in 2018 include Sears, Bon-Ton Stores Inc (OTCMKTS:BONT), bebe stores, inc (OTCMKTS:BEBE), Destination Maternity Corp (NASDAQ:DEST), and Stein Mart, Inc. (NASDAQ:SMRT). Along with the closures will be thousands of job losses.
“Bed Bath & Beyond closing Paseo store,” Albuquerque Journal, January 8, 2018.
“Ventura Place Shopping Center – Albuquerque,” Albuquerque Web Mall, last accessed January 9, 2018.
“Bed Bath & Beyond Inc. Reports Results For Fiscal 2017 Third Quarter,” Bed Bath & Beyond Inc. December 20, 2017.
“National retailer to close its Bechtle Avenue store in Springfield,” Springfield News-Sun, October 25, 2017.
“Bed Bath and Beyond closing in Meridian,” WTOK, December 14, 2017.
“Weekly Store Openings and Closures Tracker 2018 #1,” Fung Global Retail Tech, January 5, 2018.