Analysis Of Warren Eisenberg And Leonard Feinstein Founded Bed Bath & Beyond ( Bbby )

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BBNY Company: In 1971, Warren Eisenberg and Leonard Feinstein founded Bed Bath & Beyond(BBBY). BBNY begun its journey with two stores, followed by a superstore launch in 1985. Since then, company underwent a massive expansion strategy and was operating 575 stores towards the end of year 2003. BBBY’s growth was also fueled by adjoining business segments; it owned and operated beauty store and specialty Christmas shopping stores. In 2003, BBNY owned 30 Harmon stores and 24 Christmas Tree Shops stores by 2003. BBNY followed a niche strategy to create differentiation benefit over the competition. Founder’s strategic focus on creating good customer experience resulting in high productivity and decentralized BBNY store operations were some of the key reasons BBNY enjoyed high margins on its profit and low cost structure. Since BBNY went public in 1992, BBNY was a Wall Street’s darling stock and was favored by investors over other retail companies. BBNY stock was trading at $37 per share at the beginning of year 2004, an impressive 118% gain over its IPO price of $17 per share. BBNY’s Present Challenge – Holding large Cash and selecting optimal capital structure BBNY’s business philosophy thus far was based on the ‘cash is king’ notion and BBNY has strayed away from leveraging debt in its business operations. BBNY was sitting on $400 million dollars excess cash and there is no debt in its capital structure; which was the concerning factor for the BBNY investor community. BBNY

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