Retail Space Is At A Premium, And A Slew of Companies Are Lining Up To Take Bed Bath & Beyond's Soon-To-Be Vacant Locations

The recent Bed Bath & Beyond trials could serve as a primer for companies that failed to keep up with e-commerce or control their internal management. And what appears to be the last nail has been struck as the company has filed for Chapter 11 bankruptcy, with stores closing for good by the end of June. But don’t expect those stores to be empty for long.

The retail sector, according to Cushman & Wakefield, grew by 2,400 stores last year, the largest level of growth in a decade. And there’s a line of stores eager to grab Bed Bath & Beyond’s soon-to-be-vacated stores. 

The company’s remaining 360 stores and 120 Buy Buy Baby locations will continue to exist on the web, but in its filing, Bed Bath & Beyond said it would begin closing its brick-and-mortar stores immediately. 

CNN Business reports that chains including T.J. Maxx, HomeGoods and Ross Dress for Less have already signed leases for some of Bed Bath & Beyond’s vacant stores, with Burlington, Five Below, Nordstrom Rack and Planet Fitness also filling spaces, according to some landlords and real estate analysts. Sephora and Trader Joe’s are also looking at Bed Bath & Beyond space. 

On an analyst call earlier this year, Burlington CEO Michael O’Sullivan echoed the need for established stores awaiting the closing of locations like those held by Bed Bath & Beyond. 

"For us, the biggest source of new store locations comes from other retailers closing stores,” O’Sullivan said. “So many of our most productive locations were formerly Circuit City or Toys “R” Us or Sports Authority.” 

While Bed Bath & Beyond (BBBY) is negatively renowned for not keeping up with competitors and the Amazon behemoth online, in a recent report, Forbes also blamed activist investors who, in 2019 took over its board and “hired a CEO who heedlessly forced the private-label strategy he devised for Target on BBBY customers.” 

Entrepreneur Magazine pointed recently to new retail space being difficult to obtain since the 2008 financial crisis and the steady growth of e-commerce. The magazine quoted CBRE, which reported that the lack of new supply drives positive net absorption, rising rents and lower vacancy rates, which will likely continue in 2023.

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