Just days after announcing two major new partnerships with The Container Store and Kirkland’s, both of which include sizeable investments in the home retailers, Beyond, Inc. has announced plans to lay off 20% of its workforce.
In connection with this reduction in force (RIF) plan — which Beyond filed with the Securities and Exchange Commission on Oct. 22 — Chief Product Officer Carlisha Robinson also has been terminated without cause. Robinson served as Chief Product Officer of Bed Bath & Beyond during the brand’s bankruptcy and sale and retained the role throughout its various transformations, via new owner Overstock.com and eventually Beyond, Inc.
Beyond’s New Strategy: ‘Affinity and Data Monetization’
Perhaps more so than the fairly substantial layoffs, Robinson’s departure is an indicator of the direction Executive Chairman Marcus Lemonis is taking the company, in that the “product” is clearly going through a dramatic shift. Another clue came in the company’s Q3 earnings announcement, where Beyond described itself as “an asset-light ecommerce and affinity data monetization company offering a comprehensive array of products and services that enable its customers to unlock their home’s potential.” A mouthful to be sure, and also a significant departure from how Beyond has positioned itself up until now: “The owner of Bed Bath & Beyond, Overstock, Zulily and other online retail brands designed to unlock your family’s and home’s potential.”
Lemonis hinted at this strategic shift when reporting the company’s Q1 2024 earnings earlier this year, sharing that Beyond had entered a “wide-scoping” relationship with Salesforce centered on cleaning and better leveraging all the customer data Beyond now has from its combined brands. More detail was forthcoming in the company’s Q3 earnings, reported today (one day earlier than planned in order to coordinate with the company’s 2024 Investor Day and likely also to more expediently address the layoff news with shareholders).
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“We are in the process of transforming our asset-light business into an affinity and data monetization model with a strong technology focus, comprised of a collection of brands offered on a comprehensive platform from which customers can unlock value within the four walls of their home and four corners of their property,” said Lemonis in a statement on Beyond’s Q3 results. “We are still in the early innings of creating a robust data cooperative that will serve as the affinity and loyalty program foundation, and having recently announced partnerships with both The Container Store and Kirkland’s Home, we are well on our way. What we are ultimately building at Beyond is intended to leverage the combined strengths of all involved parties, driving improved financial performance and shareholder value.”
President Dave Nielsen referred to the effort as “transforming Beyond to an affinity marketing model” in the statement, adding that the company plans to “monetize data through our enhanced CRM and database capabilities, stand up a global loyalty program across both our owned and partnered brands and leverage our IP through a variety of global licensing partnerships.”
Cost-Cutting Required to Align with New ‘Asset-Light’ Business
In Q3 2024, Beyond saw orders across its businesses decline 19% YoY to 1.6 million and revenue decrease 16.6% YoY to $311 million, resulting in a net loss of $61 million. However, active customers did increase to 6 million, up 21% YoY.
“We delivered sequential improvement in gross margin and continued to recognize the benefits of our cost reduction actions, ultimately delivering against our commitment to improve adjusted EBITDA,” said Adrianne Lee, Chief Financial and Administrative Officer of Beyond in a statement. “We recently announced the sale of our headquarters, which is expected to close in the fourth quarter, and announced a $20 million annualized reduction in staff-related expenses as we drive towards profitability and continue to create a more variable and leverageable cost structure to support our evolving business needs. All in, we expect to have reduced our fixed expense base by an annualized $65 million heading into 2025.”
In its SEC filing, Beyond said that the layoffs were aimed at creating a “more streamlined organization to align to its asset-light business.” Most of the layoffs will be implemented in Q4.