Over the course of this past year, Bed Bath & Beyond Inc. has been a model for other house ware businesses, exceeding its own profit predictions again and again. The business has only been able to further increase its revenue as a result of Linens ‘N Things’ drop out from the market. Acting as a leader in the industry, Bed Bath & Beyond capitalized on this loss of competition by reducing its advertising costs, a heads up and logical financial move by the company.
Bed Bath’s improvements are evident. In the latest period of this past year, it increased its profit by 34% and its revenue by 12% since last year. The company had predicted a sales increase in the high single digits by the end of the year, and it generated 7.4% increase, which was on the upside of the prediction. In addition, the company’s gross margin rose by .5% as well.
As a result of such steady improvement, Bed Bath continues to grow. In just the latest marking period of this year, the company has opened seven new stores.
It's been extremely noticeable that Bed, Bath, & Beyond's profits have gone up. They do a great job with appealing to college students and their needs, along with most typical families.Something I don't understand though is how they have capitalized on the loss of competition by reducing their advertising costs. Wouldn't it make more sense to continue advertising the same amount and lure in consumers who once bought Linens 'N Thing's products?
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