A key part of Bed Bath & Beyond’s history appears to be making its return.
The parent company, now known as Neighborhood Intelligence, will open a stand-alone Bed Bath & Beyond store that is reminiscent of the original Bed Bath & Beyond locations.
The 19,000-square-foot store opens Saturday and features familiar mainstays, including its towel wall, bedding displays and, of course, the famous coupons.
“We’re bringing back the things customers have always loved, from the iconic shopping experience to the brands, products, and value they remember, while introducing new ways to help customers make the most of every room in their home,” Neighborhood Intelligence President Amy Sullivan said in a statement.
As part of its broader turnaround efforts — which have included acquiring companies like Kirkland’s and The Container Store — Neighborhood Intelligence has been recalibrating its brick-and-mortar footprint.
Bed Bath & Beyond debuted a co-branded store concept with The Container Store in the spring, which combined elements from both retailers, including organizational products, design services and a broader assortment of home products.
But the company has also been in the process of shuttering underperforming stores from its recent acquisitions. Neighborhood Intelligence will have closed 11 Container Store locations by the end of the year and is in the process of shuttering 39 Kirkland’s locations, CEO Marucs Lemonis told analysts Thursday. Those locations were four-wall negative and many had leases expiring in January.
The Arizona store set to open this weekend is taking over a former Container Store location that was also four-wall negative, Lemonis said.
Neighborhood Intelligence’s focus is changing, though. Its deals with Fathom Holdings and F9 Brands were called off in recent months, and Lemonis said the company is not pursuing any additional acquisitions.
“We believe there’s significant opportunity with the businesses we already own, and our priority is to make them work better together and to grow organically and to improve profitability,” he said.
In its third quarter earnings report on Thursday, Neighborhood Intelligence said revenue grew 98% to $509 million, almost entirely driven by its recent acquisitions, which contributed $229 million to total revenue. With those acquisitions stripped out, revenue increased by about 9%. Gross margin was about 34%.
Its e-commerce business demonstrated strength in the period, increasing 9% — the largest growth it has had in 19 quarters. That was primarily driven by 75% growth from Overstock.com.
The Bed Bath & Beyond banner grew its revenue by $23 million compared to the year-ago period, with 1.5% growth in order volume and a 7.4% increase in average order value.
“What gives me confidence is that we’re not relying on a housing recovery to make this business work,” Lemonis said. “Consumers are dealing with affordability challenges and historically low housing turnover, but they continue to spend on maintaining, organizing and improving their homes. Our brands are positioned to serve those needs today, with additional opportunity as housing activity improves.”
Losses in the period grew, however. Operating loss expanded to $62 million from about $12.5 million in the year-ago period, while net loss was over $26 million compared to $4.5 million last year.
Neighborhood Intelligence is projecting fourth-quarter sequential revenue growth of 5% over the third quarter, which factors in store closings.
For 2027, consolidated revenue is expected to be in a range of $2 billion to $2.1 billion, with gross margins to be between 33% and 34%. Eventually, Lemonis sees gross margin sitting closer to 37%.
“If you look at the margin improvement that our company has experienced over the last, call it, eight quarters, we know how to generate margin, we know how to eliminate those unprofitable SKUs, those unprofitable vendors and how to properly calibrate assortment and sourcing,” Lemonis said, highlighting the global sourcing team that came over as part of the Kirkland’s acquisition.
The executive also highlighted mistakes the original Bed Bath & Beyond made leading up to its 2023 bankruptcy, including moving away from major brand partners, such as Shark, Cuisinart and Laura Ashley.
Lemonis said The Container Store, on the other hand, has the “perfect balance” of stocking the right products that give consumers confidence in the company, but also providing pricing flexibility by “sourcing products globally that not only break the elasticity curve to create demand, but give us the kind of margins that allow us to achieve 37% [gross margin].”
However, The Container Store has severed ties with at least one longtime partner. Home organizational company and lifestyle brand The Home Edit on Thursday said its products will be removed from the retailer. The brand launched an exclusive collection in The Container Store in 2019.
“We've been partners for a really long time, and we're pretty surprised,” The Home Edit co-founders Clea Shearer and Joanna Teplin said in a video posted to the brand’s Instagram on Thursday. “You might have noticed that The Container Store, slash Bed Bath & Beyond, is going through some changes, and it appears to us that they're working out what their identity is. And it doesn't include us.”
Shearer and Teplin said the brand is moving “very shortly to some pretty exciting retailers,” though didn’t provide specifics. In response to Retail Dive’s request for comment, Neighborhood Intelligence’s Sullivan said The Home Edit’s message was “not fully accurate.”
“When we acquired The Container Store, a 1-year agreement was in place that expires in December of 2026,” Sullivan said in an email. “We are not signing a new agreement because the rate of sale of the product doesn’t support a reorder but we do still have the product in our stores today and will continue to sell through the remaining assortment and honor the relationship with The Home Edit.”
The Container Store has been bringing in new inventory across several categories, including bathrooms, bedrooms and kitchens, while “at the same time [having] sort of a recalibration and a revitalization of their legacy storage and org department,” Sullivan said.
“Making our stores more productive is only part of the opportunity. We also need to improve the economics behind the products we sell,” Sullivan said. “Through Kirkland’s, we acquired product development and global sourcing capabilities, including direct factory relationships. Those capabilities allow us to complement national brands with differentiated products, improve product costs and strengthen margins. We expect meaningful benefits from new sourcing and assortment programs beginning in the middle to latter part of 2027.”
