Bed Bath and Beyond 'Repair': Why Should Consumers Care?

A recent earnings report from Bed Bath and Beyond reveals the depths of their challenges:

- Ryan Cohen threw them a potential lifeline recently, but it's not clear to me if this is helpful or not -- the idea is to sell off Buy Buy Baby, ok, then what for the rest of the company?

Good idea or not, seems like a distraction for management.

- Sales in categories representing two-thirds of their revenue had inventory challenges.

What's worse than a SKU rationalization that consumers don't adopt? SKU rationalization where your inventory doesn't show up in stores.

Knowing they can stop by Target, Walmart or Amazon, why would consumers come back to Bed, Bath and Beyond again?

- Core problem remains: Why Do Consumers Care?

Mark Tritton and the management team are not idiots. They assessed the situation correctly. The company needed transformation including store revitalization, private label, and digital transformation. The company had historically been woefully underinvested.

That's not the problem.

The problem is, when the consumer has alternatives, will they reward your particular investments?

I think that's where Bed Bath and Beyond is now. Stuck between these two poles:

- we can't succeed if we don't invest.

- consumers may not give us credit for any of these investmenets.

Is this management's fault? I would think not. To me, this type of problem is the issue of the Board.

You think management would not give it the old college try if the Board is behind them? Of course they would.

Is that where the smart money is though?

Unclear.

I liken it to putting in a full chef's kitchen in an old house before you sell it. Yes it will raise the value, but will it reward the premium you just paid over just a basic kitchen in the process of selling the business? Not likely.