The first dual-branded Container store and Bed Bath & Beyond opened in Dallas.
Bed Bath & Beyond
Bed Bath & Beyond is staging a major comeback under President Amy Sullivan, transforming the hero brand into the centerpiece of a broader home ecosystem that spans retail, organization, design services, remodeling and home improvement.
And the strategy took its latest step forward last month with the opening of a new format Bed Bath & Beyond and Container Store location in Dallas, with a concept that Sullivan believes could redefine how consumers shop for their homes.
"Everything will have the hero brand of Bed Bath & Beyond," Sullivan, a retail veteran recently-appointed President, said speaking from Nashville. "It has a customer database that has a reach far greater than Container Store."
The Dallas location is the first tangible expression of a strategy that combines Bed Bath & Beyond, The Container Store and Kirkland’s into a unified proposition. Rather than operating as separate banners under one corporate umbrella, Sullivan wants customers to experience them as parts of a single, home-focused destination.
It’s a move that follows the acquisition of The Container Store, which has provided a ready-made physical platform set to accelerate Bed Bath & Beyond's return to brick-and-mortar retail.
"The retail pillar of our everything-home vision is that Bed Bath & Beyond, Container Store and even the Kirkland’s acquisition all bring a different piece of home for the consumer that does not compete but complements," she said. "Container Store has amazing real estate. As we think about omnichannel and really bringing brick and mortar back, their real estate was prime for us."
Sullivan points to the broader industry trend back towards store-based retail, including companies such as Wayfair expanding their physical footprints.
"There is a shift back to in-store shopping," she says. "We want to be a part of that."
Sullivan also understands the power of nostalgia and brand equity and has intentionally woven familiar elements into the Dallas location.
"The first thing you'll see when you walk in the door is the gadget wall," she said. "A giant wall full of kitchen gadgets, more than you can count."
The retailer has also brought back other signature elements to anchor the assortment and create an environment that people remember, with Sullivan pointing to: "The impact of the towel wall, the impact of the gadget wall."
The layout is organized around rooms rather than brands, allowing products from Bed Bath & Beyond, The Container Store and Kirkland's to coexist naturally.
"You’ll walk into kitchen and find everything from cookware to food prep and storage, gadgets, tabletop and those sorts of things," Sullivan added.
The new store format is designed around room sets, mixing the key brands.
Bed Bath & Beyond
The retailer has also introduced a rotating fashion-home element inspired by Kirkland’s merchandising expertise. Central areas within stores will be refreshed every eight to 12 weeks, with trend-driven, seasonal merchandise designed to encourage shopping frequency.
Historically, Sullivan notes, Container Store customers visited only once or twice annually. By introducing more decor and seasonal products, the company hopes to create reasons for shoppers to return several times a year.
The Dallas opening is only the beginning, with the company is already rolling out Bed Bath & Beyond branding across dozens of Container Store locations. Sullivan says approximately 98 stores are currently involved in the conversion effort, while another 50 Kirkland's locations will eventually become a combination Bed Bath & Beyond and Container Store formats.
An additional 150 stores are expected to become smaller format Bed Bath & Beyond Seasonal Living locations.
"If you think about the capital investment of opening 100 new stores, this is certainly much easier," Sullivan said. "We are also looking at new real estate. I expect us to open anywhere from five to 10 stores a year."
The company is also evaluating former Bed Bath & Beyond locations that could potentially be reoccupied.
"We are actively looking at where there were amazing locations in the past that would be easy to go back into,” she added.
One of Sullivan's biggest priorities is addressing what she sees as a pricing challenge at The Container Store. For years, the retailer occupied a premium position within the home organization market. While that strategy helped build a loyal customer base, Sullivan believes it eventually limited growth.
Iconic elements such as the towel wall are back.
Bed Bath & Beyond
"Container Store has been top of the pyramid in pricing," she said. "We don't think it's affordable and we don't think it's accessible to all customers."
As a result, the company has begun a substantial pricing review and she said that the company is resetting and rolling back pricing on 2,000 SKUs to make them more affordable to the consumer at a time when competitors including Target and Walmart have expanded aggressively into home organization.
While stores are headlining, Sullivan is also clear that retail is only one piece of a much larger plan that lies in home services, having announced plans involving businesses such as Cabinets To Go and Lumber Liquidators, while The Container Store's Elfa custom closet business plays a central role in the strategy.
"Our passion about the home services part of the business is probably where you'll see the most growth over the coming years," she said. "We see Elfa as such untapped potential.”
Large-format locations will increasingly incorporate services and products tied to home improvement projects, including kitchens, cabinetry, flooring and custom design solutions.
"The margins of that business, when you add a service in, are incredible compared to what you could get just selling brick-and-mortar or ecommerce," Sullivan said. "Once a customer trusts you to get over the threshold of their home and into their home for a service, the lifetime value and stickiness is a lot greater."
Sullivan is also determined not to repeat the mistakes that contributed to Bed Bath & Beyond’s decline before being acquired by Overstock. In particular, she points to the former company’s aggressive shift toward private-label products and is promising a “house of brands that people trust" approach.
The coupon is also returning. "People are obsessed with the coupon," Sullivan said. “The coupon is back.”
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