Nestwell, the First of Many Private Labels to Come From Bed Bath & Beyond

It’s been over a year since Bed Bath & Beyond, which is celebrating its 50th year, began a turnaround under CEO Mark Tritton, who left his role as chief merchandising officer at Target to join the home-goods purveyor in November 2019. Tritton's leadership has already returned the company to growth, with comparable sales up 5% for the core Bed Bath & Beyond banner in the third quarter that ended Nov. 28. Now, the transformation is taking another big step with the launch of Nestwell, a private label—or what the company calls an "owned brand"—bath and bedding line. It's the first of ten in-house brands planned for the next two years. Private label a key to growth Nestwell encompasses a range of products such as sheets, pillows, blankets, duvets and bath towels in what is one of the retailer’s most important categories. "One of the things we've done ... is to bring high quality, affordable-owned brands to our customers," said Cindy Davis, Bed Bath & Beyond's chief brand officer, of the launch. "That was one of the things, honestly, we weren't bringing to them [before]," she added. The launch of Nestwell will be followed by seven additional brands this year alone in those very categories. Six—including Nestwell—are scheduled to be unveiled before the back-to-college season in the summer. "We saw it as a huge opportunity from a business perspective, as part of the overall curation we're doing of our assortment, to bring a range of owned brands really across all of our core domains, across bed, across bath, across kitchen, storage and organization, and decor," Davis explained during an interview. More brands on the way Consumers can also expect a spa-inspired line of products under the name Haven in April. "So literally, we have an owned brand launch virtually every month this year," Davis pointed out. Bed Bath & Beyond’s foray into owned brands will likely be the most scrutinized of the big box retailer’s initiatives, given Tritton was hired in large part because of his success in the category while at Target. It should be noted private label brands also have several advantages. Namely, they help differentiate a retailer from its competitors, allow it to create products its wholesale partners may not offer, enable the banner to charge less for the products than consumers might find elsewhere and provide a higher profit margin than wholesale brands. The retailer's aim is to grow share of sales from 10% to 30% within the first three years for its owned brands. Creating brands in-house Rather than tapping outside agencies, Nestwell and the marketing around it were all created in-house. "When it comes to how we market these owned brands, they are such an important pillar of the overall brand positioning for Bed, Bath & Beyond [that] we felt like it was really important for our internal team to [help] us bring them to life from a marketing perspective," Davis said. In the development of Nestwell, the retailer was seeking a name that conveyed cozy bedding and bath products while still something that was differentiated from other owned brands. And, most importantly, it had to be memorable, Davis said. The process began with hundreds of names that were then whittled down utilizing input from customers, as well as feedback from the merchant and marketing teams. The bigger turnaround picture Unlike other turnarounds like Best Buy, or even other growth strategies such as at Tritton's former employer Target, Bed Bath & Beyond will largely eschew the popular shop-in-shop strategy embraced by a number of retailers. Instead, its redesigned store format will focus on separate departments or sections that emphasize a different room of the home and showcase its owned brands. Bed Bath & Beyond has earmarked about $250 million to remodel 450 stores over a three-year period that began on March 1, according to a spokesperson. The remodels also include a more curated assortment, a sleeker layout, new signage and self-checkout kiosks, among other features. Meanwhile, Bed Bath & Beyond continues to streamline its operations, having completed the sale of Cost Plus World Market in January, in addition to selling assets such as Christmas Tree Shops, Linens Holdings and PersonalizationMall.com last year, generating more than $500 million in proceeds. The retailer is also in the process of shuttering some 200 locations. It has about 1,000 stores in the U.S., Puerto Rico, Canada and Mexico.