Shares of Bed Bath & Beyond surged nearly 50% on Wednesday after the company said it would launch three private label brands this quarter, putting this key element of its turnaround strategy ahead of schedule.
With these launches, Bed Bath & Beyond will have introduced six new brands within the past five months — and a month earlier than expected. Notably, the products will be in stores in time for the back-to-school shopping season, which is the second biggest period for consumer spending after the Christmas holidays.
The stock is up nearly 118% this year putting its market value at more than $4.2 billion.
“What we are seeing is a period of transition where we are exiting older products … and getting ready to put in those new items,” said CEO Mark Tritton, in an interview with CNBC’s Courtney Reagan on “Squawk on the Street.” He expects the bulk of new products to enter the stores over the next few months.
Under Tritton, the retailer is trying to turn around its performance. It has exited noncore businesses, closed underperforming stores and is using the store brands as a way to draw in shoppers with products that can only be purchased at Bed Bath & Beyond. Private label brands have been a key sales driver at Target, where Tritton previously served as chief merchandising officer.
Bed Bath & Beyond’s new brands include: Our Table, a line of kitchen and dining ware; Wild Sage, a home collection targeted to younger consumers with eclectic taste; and Squared Away, a line of storage, organization and cleaning products.
Although there will be a transition period as the new products arrive on shelves, Tritton expects shoppers stocking up to head back to college will see many of the new items.
“They are going to find six new owned brands that feature great price points, great quality and great style for them to buy from that weren’t there last year,” Tritton said.