In a surprising turn of retail events, the tariffs have brought Bed Bath and Beyond back from bankruptcy with a new business design that defies conventional wisdom. The company was recently caused by e-commerce disruption and corporate missteps.
After closing down 360 stores and filing for Chapter 11 in April 2023, Overstock.com bought the brand, renamed it Beyond Inc., and aimed to adopt an online-only retail approach. Now, the company is returning to brick-and-mortar retail after a $25 million agreement with Kirkland’s Inc.
The story of Bed Bath & Beyond’s comeback sheds light on how tariffs and global economic forces can reshape retail landscapes. Here, we analyze how tariffs, unforeseen marketplace evolution, and a fortuitous merger might just have pulled one of retail’s darling brands back from the brink.
The Rise and Fall of a Retail Behemoth
Bed Bath and Beyond’s (BBBY) decline was dramatically quick. After earning $12 billion in sales in 2017, the company faced mounting losses due to distressed store formats, weak e-commerce execution, and increasingly popular competitors, such as Amazon and Target. In 2023, the company filed for Chapter 11 bankruptcy, closing all its stores.
However, when the brand was acquired by Overstock.com for $21.5 million, it reached a key turning point after rebranding itself as Beyond Inc. and initially aiming to revive the business via online stores.
However, seeing the long-term worth and exposure of physical presence, the company has now partnered with Kirkland’s Inc. to begin opening smaller, neighborhood-focused stores across the U.S. in a calculated return driven by shifting trade policies, consumer shopping habits, and alliance strategies.
Tariffs and the Shift in Global Trade Forces
The recent changes in U.S. trade policy have reshaped the way American retailers buy and price merchandise. Tariffs have increased the cost of many imported products, such as furniture and appliances—the type of products Bed Bath & Beyond was known for.
For example, before the tariffs, BBBY relied on suppliers from other countries, which was risky. When tariffs were added, the company moved 68% of its products to suppliers in Mexico and 22% to U.S. suppliers, reducing costs by 19%.
Thus, as the tariffs increase expenses, retailers are reconsidering their supply chain and seeking more local manufacturing or domestic warehousing of stock. For BBBY, opening physical stores is an opportunity to have more control over distribution and allows it to react instantaneously to tariff-driven price fluctuations.
Strategic Partnerships as a Path to Revival
Beyond Inc.’s deal with Kirkland’s Inc. is not an economic handshake but a survival blueprint. With Kirkland’s $25 million investment, the deal enables both businesses to share outlets, reduce overheads, and benefit from one another’s customer bases.
Kirkland’s gains access to more home products and Bed Bath & Beyond gets retail space without incurring the cost of new locations. These symbiotic relationships aren’t just trendy; they’re becoming a necessity for a high-cost, post-pandemic retail landscape.
In this new chapter, strategic partnerships are as valuable as customer loyalty. Bed Bath and Beyond is a case study of how sharing intellectual and physical capital can expand reach and reduce the vulnerability that led to its initial downfall.
Omnichannel Retailing
Bed Bath and Beyond’s return isn’t just physical; it’s omnichannel. The brand is now committed to connecting in-store experiences with online convenience. In an age where consumers alternate between virtual carts and actual aisles, brands that can combine the two prosper.
Beyond Inc. is using data analytics, mobile shopping experiences, and curbside pickup to maximize the overall shopping experience. The new strategy shifts away from stand-alone operations to combined customer experiences.
The hybrid strategy is a hedge, too: when web ad costs rise, or supply chains become disrupted, brick-and-mortar stores can step in—and vice versa. Such interchangeability will be the key to riding the moment’s undependable consumer landscape.
Adapting to the New Tariffs
Bed Bath & Beyond’s surprising comeback is due to its tariff strategy. Tariffs are generally seen as a bad thing for companies, but BBBY saw them as an opportunity to adapt and improve.
For example, the company began to use AI to better control its inventory, avoid purchasing products with high tariffs, and reduce tariff costs by 37%. Further, BBBY began using over 1,400 local U.S. artisans, growing their “American Craft” range by 41%.
BBBY had to raise their prices as a result of increased tariffs but began offering extras, such as free assembly, offsetting customer backlash by making them believe they were getting a better deal. Due to this, BBBY sales rose by 14% in the first quarter of 2025.
Confronting Economic Challenges
Today’s economy is a minefield of rising inflation, unstable supply chains, and fickle consumer confidence. For BBBY, flexibility is the key to survival. Their stores are small, reducing rent, employee, and utility costs, leaving the company with more pricing latitude.
With tariffs increasing the price of imported goods, the company has already begun to react strategically by using local suppliers and improving its inventory processes. Further, they have moved toward focusing on timeless and staple home goods versus trendy, seasonal items, appealing to the budget-conscious consumer without sacrificing quality.
By already preparing to respond to the next increase in interest rates or supply-chain bottleneck, the company is setting itself up to be resilient. It’s economic pragmatism disguising itself as a brand renewal.
Learning from Past Failures
Beyond Inc. has acknowledged what did not work the first time around. By declaring bankruptcy in 2023, BBBY was able to get rid of $5 billion in debt. This made it easier for the company to handle tariff costs and raise prices without losing customers.
Further, the company was bloated—too much space, too many SKUs, and not enough digital acumen. Now, their product selection is more edited, store footprints reduced, and leadership more focused.
The company has clearly learned from its previous overexpansion and lack of investment in technology. For example, employee training and customer service are now prioritized because excellent logistics can’t necessarily save a bad in-store experience.
The Competitive Landscape
The home goods industry is a battlefield, with goliaths such as Amazon, Walmart, and Target calling the shots. But BBBY isn’t trying to beat them at their own game. Instead, it’s differentiating itself based on niche appeal and experiential retail.
The new stores are designed for discovery, with curated stock and sections that encourage browsing and touch-and-feel interaction—something e-commerce can’t replicate. The brand is also doubling down on local assortments tailored to local preferences, something national chains lack.
These moves put Bed Bath and Beyond in a position between discount outlets and high-end retailers. It’s a contrarian strategy in an industry that tends to pursue scale instead of at the expense of consumer relations.
The Future Outlook
BBBY’s comeback shows that tariffs can push companies to innovate and become stronger. By using these challenges as opportunities, BBBY transformed itself into a more efficient and appealing business.
However, Bed Bath and Beyond still faces daunting challenges and rich possibilities. Its survival will depend on consistently executing its omnichannel strategy, careful data use, and continued innovation in store format and customer experience.
Still, the brand’s return is an excellent example of corporate agility and economic Darwinism. Where brands suddenly disappear into thin air, Bed Bath and Beyond’s return is a testament that sometimes, with the right mix of humility, strategy, and yes—tariffs—even the most written-off brands can stage an unlikely comeback.
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