Canaccord: Bed Bath New E-Commerce Platform to Fuel Long-Term Growth
LONDON-Bed Bath & Beyond's upcoming launch of its new e-commerce platform should set the specialty retailer up for long-term growth, according to research from Canaccord Genuity.
The research firm said the "much-needed" new platform is set to debut later in the second quarter. It will involve both Bed Bath & Beyond and buybuy Baby, the retailer's infant-products specialty store. "We think (Bed Bath) has an opportunity to leverage operating expenses in (the second half of 2013) as it laps sizable strategic investments including e-commerce development, the integration of Cost Plus, the consolidation of corporate headquarters and the initial building phase of a new IT data center," Canaccord's report said.
The report added that e-commerce portion of Bed Bath's business is a very small percentage of total sales, an estimated 1 percent of the total. According to Canaccord, this is far lower than Williams-Sonoma, whose Internet sales in 2012 were 41 percent of its total, according to the company's estimate. Williams-Sonoma's e-commerce share "is a clear example of the sizable opportunity that exists within the (home furnishings) category online," Canaccord said.
Canaccord also said Bed Bath maintains "an obscene cash balance" of $4.56 a share, enabling further investments in technology and enhancing shareholder returns through stock repurchases.