Bed Bath & Beyond will sell its home and baby stuff at … Kroger

Bed Bath & Beyond (BBBY) will sell some of its bedding, storage and baby furniture at Kroger (KR) from next year, the two companies announced Tuesday. Bed Bath & Beyond’s items will first be available on Kroger’s website for delivery in early 2022 and then in dedicated convenience stores in select Kroger stores.

Bed Bath & Beyond also said Tuesday that it will launch its own third-party marketplace online to expand its product range and will implement a $ 1 billion three-year share buyback program two years ahead of schedule.

The company’s share rose by about 80% after the announcement.

Bed Bath & Beyond hopes that their partnership with Kroger will help it reach new customers and open up a new revenue opportunity for the company. Bed Bath & Beyond also said it will sell some of its own private label brands at Kroger.

Bed Bath & Beyond is trying a turnaround under a new CEO after years of disappointing sales and store closures. The company grew early in the pandemic as customers who spent more time at home bought home goods, but sales fell over the summer due to supply chain challenges.
For Kroger, the sale of household and baby items can enable customers to offer more than groceries when shopping on its website or visiting its stores – just as some of its competitors like Walmart (WMT) do now. Kroger created an online marketplace for third-party sellers last year, and it seeks to add more merchandise to the site.

Neil Saunders, CEO of GlobalData Retail, said in a note to customers that the partnership offers benefits for both chains.

“Hooks represent a huge channel for Bed Bath & Beyond and can bring more shoppers in touch with the brand. This alone will help the company solve one of its key issues: staying on the consumer radar,” he said. “Kroger must push itself beyond groceries and strengthen its non-food business so that the partnership with Bed Bath & Beyond makes strategic sense.”

Other companies have entered into unlikely partnerships in recent years, such as Kohl’s and Weight Watchers and Apple and Target.
Walmart and Gap announced a bond over the summer to sell Gap homegoods on Walmart’s website.

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