Bed Bath & Beyond Inc. operates specialty retail stores nationwide, including
Bed Bath & Beyond stores ('BBB'), Harmon stores ('Harmon') and Christmas Tree
Shops stores ('CTS').'The Company believes it is the nation's largest operator
of stores selling predominantly better quality domestics merchandise and home
furnishings.
BBB stores are almost exclusively of a 'big box' format.'BBB offers a wide
assortment of merchandise at everyday low prices that are substantially below
regular department store prices and generally comparable to or below department
store sale prices.'BBB's domestics merchandise line includes items such as bed
linens, bath accessories and kitchen textiles, and BBB's home furnishings line
includes items such as cookware, dinnerware, glassware and basic housewares.'
BBB believes that it offers a breadth and depth of selection in most of its
product categories that exceeds what is generally available in department stores
or other specialty retail stores and that this enables it to offer customers
the convenience of one-stop shopping for most household items.
BBB's strategy for merchandising and marketing is to offer better quality merchandise
at everyday low prices; to maintain a breadth and depth of selection in its
product categories that exceeds what is generally available in department stores
or other specialty retail stores; to present merchandise in a distinctive manner
designed to maximize customer convenience and reinforce customer perception
of wide selection; and to emphasize dedication to customer service and satisfaction.
BBB stores primarily offer domestics merchandise and home furnishings, which
include:
Domestics Merchandise
''bed linens and related items: sheets, comforters, duvet covers, bedspreads,
quilts, window treatments (such as curtains and valances), decorative pillows,
blankets, dust ruffles, bed pillows and mattress pads.
''bath items: towels, shower curtains and liners, waste baskets, mirrors, hampers,
robes, slippers, scales, bathroom rugs, wall hardware and other bath accessories.
''kitchen textiles: tablecloths, placemats, cloth napkins, dish towels and
chair pads.
Home Furnishings
''kitchen and tabletop items: cookware, cutlery, kitchen gadgets, dinnerware,
bakeware, flatware, drinkware, serveware, glassware, food storage containers,
tea kettles, trash cans and cleaning supplies.
''fine tabletop and giftware: formal dinnerware china, fine crystal stemware
and barware, crystal giftware, metal giftware, flatware, decanters and carafes,
and decorative vases and bowls.
''basic housewares: storage items, closet-related items (such as hangers, organizers
and shoe racks), general housewares (such as brooms, garbage pails and ironing
boards), lifestyle accessories (such as lamps, chairs, ready to assemble furniture,
furniture covers, accent rugs, and clocks) and small electric appliances (such
as blenders, food processors, coffee makers, vacuums, irons, toaster ovens,
hair dryers, heaters and humidifiers).
''general home furnishings: gift wrap, candles, personal care products (such
as soaps, lotions and other health and beauty care items), picture frames, wall
art, juvenile items (such as toys and children's books), artificial plants and
flowers and seasonal merchandise (such as summer and holiday-related items).
BBB, on an ongoing basis, tests new merchandise categories and adjusts the
categories of merchandise carried in its stores and may add new departments
or adjust the size of existing departments as required. BBB believes that the
process of adding new departments and expanding or reducing the size of various
departments in response to changing conditions is an important part of its merchandising
strategy.
Competition
The market for domestics merchandise and home furnishings is fragmented and
highly competitive.'While the Company believes it is the preeminent marketer
in its segment of the home goods industry, its BBB stores compete directly with
a small number of store chains selling domestics merchandise and home furnishings.
In addition, BBB stores compete with many different types of retail stores that
sell many or most of the same products. Such competitors include:'(I) better
department stores, which often carry many of the same product lines as BBB'stores
but do not typically have the same depth or breadth of product selection, (II)'
specialty stores (such as specialty linens or housewares retailers), which often
have a depth of product selection but typically carry only a limited portion
of the product lines carried by BBB stores, and (III)'discount and mass merchandise
stores. In addition, BBB stores compete, to a more limited extent, with factory
outlet stores that typically offer limited quantities or limited lines of better
quality merchandise at discount prices.