A shopper carries a Buy Buy Baby shopping bag in New York, USA on Thursday, August 25, 2022.
Gabby Jones | Bloomberg | Getty Images
Buybuy Baby was a rare bright spot for the struggling Bed Bath & Beyond.
However, on Thursday, the children’s goods chain reported a sharp quarterly drop in sales, sparking bewilderment and raising fears it could also be losing customers.
Buybuy Baby’s like-for-like sales were down by teens at a high percentage year-over-year for the three-month period ending August 27. At the namesake stores and the Bed Bath & Beyond website, like-for-like sales fell 28% year-on-year.
Retail sales surged last year thanks to government incentives, including child tax credits. Interim CEO Sue Gove said on Thursday that this caused Buybuy Baby to face tough comparisons this quarter but retained market share in the category.
Buybuy Baby was one of the strongest businesses and most valuable assets of its parent company. As Bed Bath & Beyond’s eponymous stores closed, the company opened more BuyBuy Baby stores. Its banner also caught the attention of activist investor Ryan Cohen, co-founder of Chewy and chairman of GameStop, who pushed for a more effective banner to be sold. It is reported that this aroused interest among potential buyers.
Bed Bath, which agreed to explore strategic Buybuy Baby options as part of a truce with Cohen, said it is focused on driving sales and revamping the business, including baby registration. (Several other companies, including Walgreens and Kohl’s, also cited a colder M&A market, causing them to delay or end potential deals.) Cohen has since sold his entire stake in Bed Bath.
BuyBuy Baby brand president Patty Wu told investors on Thursday that the banner plans to return to growth in the second half of the year. She spoke about her ambition to be a place for parents to turn during pregnancy and beyond, pointing to several ongoing initiatives.
She said that Buybuy Baby will launch its first private label brand in November, which will include clothes, furniture and decor for babies and toddlers at a good price. It will offer popular holiday merchandise such as matching pajamas for the whole family and offer related resources on its website such as tips on outdoor gear to make flying or traveling more comfortable during the holidays.
In addition, she said that by early next year, he will restart his children’s registry and expand the number of activities in the store.
“We are going to turn our stores into parenting centers by bringing food and education together,” she said.