By Nathaniel Meyersohn, CNN Business
Try to adapt to retail can create strange bedfellows. Like household goods chains and supermarkets.
Bed Bath & Beyond will sell some of its bedding, storage and baby furniture at Kroger starting next year, the two companies announcement Tuesday. Items from Bed Bath & Beyond will first be available on the Kroger website for delivery in early 2022, and then in dedicated mini-shops in select Kroger stores.
Bed Bath & Beyond also announced on Tuesday that it will launch its own online third-party marketplace to expand its product assortment and complete a $ 1 billion three-year share buyback program two years ahead of schedule.
The company’s shares jumped about 80% after the announcement.
Bed Bath & Beyond has traded volatile swings over the past few months and has become a so-called meme stock, driven in part by the support of the army of Reddit fans. Curtis Nagle, Bank of America analyst said over the summer that he would stop rating Bed Bath & Beyond because stocks “were no longer trading on fundamentals.”
Bed Bath & Beyond hopes its partnership with Kroger will help it reach new customers and open up a new revenue opportunity for the company. Bed Bath & Beyond has also announced that it will sell some of its own private labels at Kroger.
Bed Bath & Beyond is attempt a turnaround under a new CEO after years of disappointing sales and store closings. The business grew at the start of the pandemic, with customers spending more time at home shopping for household items, but sales fell over the summer amidst supply chain challenges.
For Kroger, selling home and baby items can allow it to offer customers more than groceries when they shop on its website or visit its stores, just like some of its competitors like Walmart are doing it now. Kroger created an online marketplace for third-party sellers last year and is looking to add more merchandise to the site.
Neil Saunders, managing director of GlobalData Retail, said in a note to customers that the partnership offers benefits for both chains.
“Kroger is a huge channel for Bed Bath & Beyond and can connect more buyers to the brand. That alone will help the company solve one of its key problems: staying on the consumer radar, ”he said. “Kroger itself needs to go beyond the grocery store and strengthen its non-food businesses, so the partnership with Bed Bath & Beyond makes strategic sense. “
Walmart and Gap announced a partnership over the summer to sell Gap housewares on Walmart’s website.
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