California Governor Gavin Newsom challenged Bed Bath & Beyond‘s decision to avoid opening retail stores in the state, responding on X Wednesday: “The company that already went bankrupt and closed every store across the country two years ago? Ok.”
Newsom Questions Company’s California Criticism
Newsom’s retort came after Beyond Inc. BYON Executive Chairman Marcus Lemonis announced the retailer would not operate physical stores in California, citing “high taxes, high fees, and forced, unsustainable wages.”
BYON Stock Performance Reflects Market Uncertainty
Beyond Inc. shares closed on Wednesday at $8.90, down 4.40% amid the development. The stock has gained 58.36% year-to-date, giving the company a market capitalization of $510.91 million. After-hours trading showed modest recovery with shares up $0.14 to $9.04.
The stock volatility follows the company’s better-than-expected second quarter results reported in July, when revenue of $282.25 million beat analyst estimates of $250.33 million. The adjusted loss of 22 cents per share also outperformed expectations of a 37-cent loss.
Company Cites Regulatory Environment Concerns
In his statement, Lemonis called California “one of the most overregulated, expensive, and risky environments for businesses in America.” The executive chairman said the decision prioritizes shareholders and customers over what he termed an “unsustainable model.”
“We will not participate in a system that undermines both,” Lemonis stated. “Instead, we are investing in a California strategy that works: 24–48-hour delivery, and in many cases, same-day service.”
Company Plans Name Change and Ticker Symbol Return
Beyond Inc. announced Monday it will change its corporate name back to Bed Bath & Beyond, Inc. and reclaim the BBBY ticker symbol on the New York Stock Exchange effective August 29. The move aims to leverage “one of the most valuable pieces of intellectual property that investors and consumers know today,” according to Lemonis.
Bankruptcy History Looms Over Current Strategy
The current Bed Bath & Beyond operates under Beyond Inc., which acquired the brand after the original Bed Bath & Beyond Inc. BBBY filed Chapter 11 bankruptcy in April 2023. The predecessor company listed assets and liabilities between $1 billion and $10 billion before shuttering all 360 Bed Bath & Beyond and 120 buybuy BABY physical locations.
The company plans to convert Kirkland’s locations into small-to-midsize Bed Bath & Beyond and buybuy BABY stores over 24 months, starting with a Nashville location.
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Photo courtesy: Retail Photographer / Shutterstock.com
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