Serial entrepreneur Doug Putman plans to launch his latest retail venture by taking over most of the remnants of Bed Bath & Beyond, in a new chain called rooms + spaces.
Putman, who took similar action when HMV, Toys ‘R’ Us and DavidsTea went insolvent, plans to open the home store brand in 21 former Bed Bath & Beyond locations and buy BABY storefronts later. this summer.
“We certainly think this is a growth area, the market is huge – billions and billions of dollars,” Putman told CBC News in an interview.
Putman says the chain has been studying the home and decorating space for a while and saw an opportunity when the US retailer went bankruptwhich led him to close dozens of locations across Canada.
“That’s kind of the story with most of the stuff we buy – good companies that just got lost,” he said. It’s a reference to Putman’s previous retail ventures, which all follow a similar pattern: enter and relocate to former locations of a defunct chain, or in some cases buy the brand itself.
“We felt like we could put together a team that could serve the Canadian market, like Bed Bath & Beyond used to do.”
Putman’s business will begin with 21 locations across Ontario, British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador. That’s less than half of the roughly 60 locations occupied by Bed Bath & Beyond, and Putman says he would have been happy to take more.
“In some cases there were other retailers who were interested and in some cases the offers just didn’t make sense to do so, [but] wherever we are not, we are still looking,” he said.
In total, Rooms + Spaces will launch with 800,000 square feet of retail space, plus an e-commerce website. The company will hire approximately 500 people from the start and the business will be led by Greg Dyer, the former managing director of Bed Bath & Beyond in Canada.
Putman says he would have been willing to start with even more locations, but the landlords had other tenants in mind.
A significant of these tenants was revealed in a separate news item on Wednesday, as Canadian Tire announced it would be takeover of 10 former Bed Bath & Beyond stores and convert them to Mark’s Work Wearhouse and Pro Hockey Life locations.
Financial terms of Putman’s deal have not been released, but the price of Canadian Tire’s deal – $1.6 million to acquire 10 leases – suggests the owners wanted to find people to take over as many dozens of Bed Bath & Beyond locations as possible.
“They got a good deal,” says retail consultant Liza Amlani, but that doesn’t mean either company is risk-free.
The home and decor market that rooms + spaces are targeting, meanwhile, is huge and growing, she says, but already full of big, experienced players.
She notes that one of the chain’s locations will be in London, Ont., at a mall that already has half a dozen other chains selling similar products nearby, from Winners, Marshalls and HomeSense to Bouclair, Urban Barn and KitchenStuff. More.
“How do they know what the customer expects from them, since they have never existed before?” she says. “This home customer has more choices than ever.”
She says it’s a monumental task to ensure the chain will have stock on the shelves in time for the launch, but Putman says he’s confident that won’t be a problem as suppliers have been very receptive to the plan.
“It’s a lot of inventory, it’s a lot of supply chain management, but that’s all we’ve done before, so we feel pretty comfortable with our timeline,” a- he declared.
Amlani said Putman’s strategy is “a crazy idea but it could work if some ducks are in order.”