Bed bath and beyond (BBBY) will sell some of its bedding, storage and baby furniture to Kroger (KR) from next year, the two companies said on Tuesday. Items from Bed Bath & Beyond will first be available on the Kroger website for delivery in early 2022, and then in dedicated mini-shops in select Kroger stores.
Bed Bath & Beyond also announced on Tuesday that it will launch its own online third-party marketplace to expand its product assortment and complete a three-year, billion-dollar share buyback program two years ahead of schedule.
The company’s shares jumped about 80% after the announcement.
Bed Bath & Beyond hopes its partnership with Kroger will help it reach new customers and open up a new revenue opportunity for the company. Bed Bath & Beyond has also announced that it will sell some of its own private labels at Kroger.
Bed Bath & Beyond is attempting a turnaround under a new CEO after years of disappointing sales and store closings. The business grew at the start of the pandemic, with customers spending more time at home purchasing household items, but
sales fell over the summer due to supply chain challenges .
For Kroger, selling household and baby items can allow it to offer customers more than groceries when they shop on its website or visit its stores, much like some of its competitors. like Walmart (WMT) do now. Last year, Kroger created an online marketplace for third-party sellers and is looking to add more merchandise to the site.
Neil Saunders, managing director of GlobalData Retail, said in a note to customers that the partnership offers benefits for both chains.
“Kroger represents a huge channel for Bed Bath & Beyond and can put more buyers in touch with the brand. That alone will help the company solve one of its key issues: staying on the consumer radar,†a- he declared. “Kroger itself needs to go beyond the grocery store and strengthen its non-food business, so the partnership with Bed Bath & Beyond makes strategic sense.”
Other companies have made unlikely partnerships in recent years, such as Kohl’s and Weight Watchers and Apple and Target.
Walmart and Gap announced a partnership over the summer to sell Gap housewares on Walmart’s website.
Woodkirk Stone