After enduring pressure from an investor and ousting CEO Jonathan Johnson, Beyond, the former Overstock now operating online as bedbathandbeyond.com, announced Camping World chief Marcus Lemonis will join Allison Abraham as co-chairs of the company board of directors.

In response to the move, Beyond stock rallied from $19.06 a share on November 30 to peak at $19.40 by mid-morning then falling back to $18.95 by noon. Beyond stock, then still designated Overstock before a recent name change, hit a high for the year of $37.86 on August 2, according to Yahoo Finance. On August 1, the operation transitioned from overstock.com to bedbathandbeyond.com online in the United States after doing so earlier in Canada.

Lemonis was the choice of hedge fund JAT Capital Management, which holds a 9.6% stake in the company, to run Overstock, a preference it expressed to the board in a letter on November 2. However, Lemonis, who runs the outdoor recreational company Camping World and who for several seasons hosted the CNBC show “The Profit,” told CNBC in an interview that he wasn’t interested in being CEO and had joined the  Overstock board in October expecting to be named executive chairman.

Abraham became chair of Overstock in 2017 after having served on the board since 2002, as cited in the Beyond investor relations site.

Johnson steered Overstock through the acquisition of Bed Bath & Beyond’s intellectual property rights, which occurred in June, and the August 1 renaming of the overstock.com site in the United States to bedbathandbeyond.com, which occurred earlier in Canada. In a company conference call, Johnson laid out a vision for Beyond which included adding more retail websites including a closeout specialty business that would operate similarly to the original overstock.com. In recent years, Overstock reoriented itself from a closeout business to one offering first-line goods, then shifted from being a general merchandise to a home specialist retailer early this year. He departed the company on the day, November 6, when the corporate identity flipped from Overstock to Beyond. Not long before, JAT sent a letter to the company board asking it to revamp management and appoint Lemonis to an elevated position, preferably as executive chairman.

“I am intensely focused on working with the management team to drive financial results, reduce operating costs and review all performing and non-performing assets,” Lemonis stated in announcing the change in board structure. “While the team has begun taking decisive actions to restructure the company for a better future, I am eager for what lies ahead in the months to come.”

Abraham noted, “Marcus brings a wealth of experience as a public company chairman and CEO, with powerful operating knowledge in retail, branding and customer engagement. Both of us, along with the rest of the board and management team, are unified in our overarching goals of driving enhanced value for shareholders.”

Jonathan Johnson, who steered Overstock.com’s transformation into the new Bed Bath & Beyond, has departed the company on the day, November 6, it officially changed its corporate name to Beyond, Inc.

Johnson, as Overstock CEO, oversaw the acquisition of Bed Bath & Beyond’s intellectual property, the relaunch of bedbathandbeyond.com, the changing of the corporate name and a recently announced plan to expand the company’s retail business.

Johnson (pictured above) also will relinquish his seat on the Beyond board of directors. 

Beyond stated Johnson’s departure follows a mutual agreement between him and the board that the company should transition to new leadership. Beyond added Dave Nielsen, the company’s president, would become interim CEO and the board had initiated an internal and external search process to hire a permanent CEO. Beyond has also expanded the role of Adrianne Lee, CFO, who now will supervise legal and human resources functions in addition to the finance organization.

What was Overstock originally announced its acquisition of Bed Bath & Beyond intellectual property in June and indicated it would change the company’s domain name to Bed Bath & Beyond. The company almost immediately changed from the Overstock to the Bed Bath & Beyond domain name in Canada, then did so in the United States on August 1. In late October, the company announced it would change its corporate name to Beyond. At the same time, it revealed chief marketing officer Angela Hsu would leave the company. On October 26, in a conference call in association with third-quarter results, Johnson said the company would revive the Overstock banner in its original form as a clearance operation that would be part of an envisioned portfolio of developed and acquired retail brands in addition to Bed Bath & Beyond.

As the sequence of events unfolded, on October 12, activist investor JAT Capital Management announced in a filing with the United States Securities and Exchange Commission that it had acquired a 9.1% stake in what was then still Overstock. JAT sent a letter to the company board asking it to revamp management and appoint new board member Marcus Lemonis to an elevated position, preferably as executive chairman. Lemonis is chairman and CEO of Camping World, an RV and outdoor retailer and affinity group. 

“Following the recent acquisition of the Bed Bath & Beyond brand and our corporate renaming as Beyond, Inc. the board and Jonathan determined that this is the ideal time for a transition in leadership to guide the company forward,” said Allison Abraham, Beyond board chairman. “Jonathan has been integral to the company’s successful evolution over more than two decades of service. We thank him for his leadership, foresight and immense contributions that helped build the company into the leading online furniture and home furnishings retailer that it is today and is now poised to capture greater opportunities in the future.”

Johnson maintained, “I am incredibly proud of all that we have achieved to transform the company since becoming CEO, evolving to a leading online home retailer with an iconic name and a large, growing consumer base. As the company turns the page to become Beyond, now is the right time for me to also turn the page to the next chapter in my career. It has been an honor to work with such an exceptional team. I am confident the company is well-positioned to achieve broader popular reach as a bigger and better Beyond.”

Abraham also commented on the board’s confidence in Nielsen as the right person to undertake the current phase of the company’s transformation.

“(Nielsen) is currently responsible for key functions across the organization and will continue to lead our ongoing strategic initiatives in addition to new ones,” she said, “We also look forward to Adrianne taking on greater administrative responsibilities along with her role as chief financial officer. Together, Dave (Nielsen) and Adrianne (Lee) have nearly 15 years of experience at the company and have the full support of the board. They possess the right expertise and talent to lead the organization and drive improved performance while the board focuses on identifying the new CEO.”

Overstock, soon to rename itself Beyond, beat an analyst estimate in its third quarter regarding losses but came up shy of a forecast on revenues. However, in a conference call, CEO Jonathan Johnson, said the Overstock name isn’t going away forever and will be revived as part of a portfolio of brands the company envisions as it advances its home-centric Bed Bath & Beyond operation.

Company net loss in the quarter was $63 million, or $1.39 per diluted share, versus a net loss of $37 million, or 81 cents per diluted share, in the year-earlier period. Adjusted for one-time events, company net loss was $27.5 million, or 61 cents per diluted share, versus net revenue of $5.9 million, or 13 cents per diluted share, in the year-prior period, the company stated.

An analyst consensus estimate published by Yahoo Finance called for loss per adjusted diluted share to come in at 72 cents on revenues of $397.2 million.

Net revenues were $373.3 million versus $460.3 million in the year-previous quarter, the company reported. Operating loss was $40.9 million versus operating income of $5.7 million.

In the conference call, Johnson said plans for the company not only include the shift to the Beyond brand identity and consolidation of the home business under the Bed Bath & Beyond banner but also a relaunch of Overstock.com in its original form as an online clearance platform.

“Earlier this week, we announced our new corporate name, Beyond,” Johnson said. “This corporate identity builds on the value of our iconic consumer brand. It also recognizes our ability to transform into more than just a single-brand e-commerce retailer. Our goal is, over time, to transform the company into a house of brands, providing a mix of products and services across categories. Think of this as a bigger, better, bolder Beyond. Today, we provide a broad selection of on-trend furniture and home furnishings products through a single e-commerce website, Bed Bath and Beyond. In due time, we plan to reimagine the Overstock brand with a stand-alone website that offers what the brand originally was: a site selling a broad array of clearance products at remarkable prices. We plan to begin initial work on the cross-category Overstock branded liquidation-only website with the goal to launch it by the end of 2024.”

Johnson pointed out Overstock is reviewing opportunities to acquire new operations that can fit into its envisioned brand portfolio. He also noted that the company, while pleased with the progress of its relaunch of Bed Bath & Beyond in the U.S. and Canada, was disappointed with its overall revenue numbers. The company’s plans call for initiatives that should help boost sales, Johnson added. A major Bed Bath & Beyond brand-building campaign is set to begin in November as the company looks forward to the holiday sales season.

Profitability will continue to be a priority to the company, Johnson said, adding the company is now focused on investing in its transition process and growing the customer file.

Johnson indicated that the company intends to look into selling the components of its blockchain operations, Medici, as soon as possible and to a significant return on investment in the future.

In announcing the financial results, Johnson said, “Over the last three months, we have accelerated efforts to build a company with a bigger, brighter, and bolder future. On June 28, we acquired the Bed Bath & Beyond brand and intellectual property, a brand ranked in the top five most recognized home brands in the U.S. Within hours of closing the deal, we revived the brand in Canada, and in just thirty-three days we relaunched the brand in the U.S. under our asset-light operational model.”

Johnson maintained it’s important to understand the deal and how Overstock plans to monetize it going forward.

“Just a few years ago, when we first looked at acquiring the Bed Bath & Beyond business, it cost close to $2 billion,” he said. We chose to watch from the sidelines with our eye on four key assets we hoped to acquire when the opportunity presented itself: the number five most recognizable brand in the home space. In that same ranking, Overstock was number 25.”

He added that the key assets also included “100 million-plus customer file, vendor relationships with some of the biggest home category brands in the world, and valuable intellectual property. We were thrilled when that opportunity arose, and we took it.”

The deal gives Overstock additional opportunity, Johnson said.

“To provide some clarity on the economics of the deal, we break down this opportunity into two numbers totaling approximately $175 million: Approximately $25 million we paid to the bankruptcy estate for the brand and related IP and in acquisition-related fees, and approximately $150 million of additional investment to launch the brand, reignite the customer file and expand and create new categories while working to maintain our company’s core customers,” Johnson said. “We are in the early stages of capitalizing on our recent acquisition. Since launching the new Bed Bath & Beyond in the U.S. on August 1, we have been successful in acquiring new customers and reactivating past customers. Total active customers grew sequentially after over two years. As I’ve said from the onset, growing the customer file is our primary measure of success. Orders have returned to positive year-over-year growth for the first time in over two years. This acquisition has positioned us for growth over the long term.”

Overstock.com, which now operates its retail business as Bed Bath & Beyond, announced it will change its corporate name to Beyond, Inc., effective November 6.

In a separate development, Angela Hsu, chief marketing officer, announced she is leaving Overstock to pursue strategic board director opportunities. Dave Nielson, the company’s president, will handle Hsu’s responsibilities as she transitions to an advisory role and the company conducts a search for her successor.

Commensurate with the forthcoming corporate name change, Overstock will transfer its stock listing from the Nasdaq Global Market to the New York Stock Exchange and update its ticker symbol from OSTK to BYON. Beyond will continue to operate its furnishings and housewares e-commerce business under the Bed Bath & Beyond brand, the company noted.

On June 28, Overstock.com, Inc. acquired the Bed Bath & Beyond brand and associated intellectual property. Overstock renamed its retail business as Bed Bath & Beyond, with a launch under the new banner in Canada on June 29 and then in the United States on August 1. 

“Changing our corporate name to Beyond, Inc. sets us up well for a brighter future,” said Jonathan Johnson, the company’s CEO. “As we continue the process of transforming our consumer brand, our new corporate name will help us reach millions of new customers with our advantageous and differentiated, asset-light e-commerce business model. The name Beyond emphasizes our commitment to connect new and legacy customers with a wide assortment of products and services. Since our founding in 1999, the company has focused on bringing technical expertise to e-commerce and providing a simple and easy experience for consumers and supplier partners. We expect the corporate name change to enhance the awareness of our iconic consumer brand, Bed Bath & Beyond.”

As Overstock, the company’s shares will continue to trade on the NASDAQ with the ticker symbol OSTK until the close of market on Friday, November 3. Beyond, Inc. will begin trading on the NYSE with the ticker symbol BYON when markets open on Monday, November 6. 

In a LinkedIn post, Hsu stated, “It’s been a pleasure being the CMO transforming Overstock.com into a 100% home furnishing retailer in 2022 and swiftly relaunching as the new online Bed Bath & Beyond in August 2023.”

Hsu said she would refocus her career on growing companies at the strategic level via board director roles. Before joining Overstock in 2022, she was senior vice president, marketing and e-commerce at Lamps Plus.

Since acquiring the Bed Bath & Beyond intellectual properties, Beyond has been busy repositioning and responding to business developments. 

In a filing with the United States Securities and Exchange Commission, shareholder JAT Capital Management stated that it had sent a letter on October 12 to then Overstock with a series of recommendations, including:

• Development of a business plan for the next month, three months, 12 months and 36 months with financial objectives
• Development of an investor relations and public relations message that communicates company plans clearly, along with action items and key performance indicators that illustrate success or failure and near-term guidance that establishes financial guardrails and expectations for the investment community
• Empower investor relations personnel, as well as key board members, to communicate messaging developed for the Wall Street constituency and ensure expectations are aligned with likely outcomes.
• Overhaul of the management and board compensation structure to reduce or eliminate cash compensation and to emphasize stock option participation, with the CEO providing a meaningful option package at strike prices above the current market price to align interests with shareholders.
• Elevate Marcus Lemonis’s position, with appointing him executive chairman a preferred option.
• Conduct an immediate strategic review of non-core assets, most notably the blockchain operation Medici, including evaluating a potential sale or spin-off of such assets.

On October 2, Overstock appointed Lemonis as its newest independent director. He is chairman and CEO of Camping World, a major RV and outdoor retailer and affinity group. 

In an update on its third-quarter performance, Bed Bath & Beyond, the newly reconstituted business operated by Overstock.com, Inc., reported consumers are embracing the business since the changeover with the bedding, bath and kitchen products boosting the top line.

Overstock completed its acquisition of the Bed Bath & Beyond brand and other intellectual property on June 28. It  launched as bedbathandbeyond.ca in Canada on June 29 and as bedbathandbeyond.com in the United States on August 1. 

“Our U.S. business launched successfully on August 1,” said Jonathan Johnson, Bed Bath & Beyond CEO. “Consumers are showing that they love the new Bed Bath & Beyond. Even in a challenging macro-economic environment, we acquired new customers and re-activated past customers. Our topline performance is improving steadily. We have experienced year-over-year order growth since the U.S. launch, led by orders from new customers. Over the Labor Day weekend, the first major holiday event under our new brand, we were successful in attracting customers to the bedding, bath and kitchen categories, which recorded strong growth year-over-year in aggregate, for the comparable period. I thank the entire team for its dedication and focus over the last few months as we prepared to revive an iconic consumer brand in the U.S. and Canada. I remain optimistic about our future and the opportunity to gain market share under the Bed Bath & Beyond brand.”

In reporting on the evolving business, the new Bed Bath & Beyond pointed out that results prior to the new banner launch dates reflect the performance of the prior overstock.ca and overstock.com websites. Estimated financial and operational results generated by the new Bed Bath & Beyond in the third quarter to date, the period from July 1 through September 4, include:

• Mid-single-digit percent net increase in customers since the launch of the new banner in the U.S.
• Mid-single-digit percent order growth year-over-year with high-teens percent growth year-over-year since the U.S. launch.
• Mid-teens percent decline in revenues year-over-year with low-double-digit percent decline year-over-year since the U.S. launch.
• High-teens percent decline year-over-year in average order value with low-20s percent decline year-over-year since the U.S. launch.
• Approximately18% gross profit as percent of revenue.
• Approximately 15% sales and marketing expense as percent of revenue.
• More than 4.8 million active customers on a 12-month basis as of September 4. 

“Visits to our website have increased and conversion has improved,” Johnson pointed out. “Our promotional offers and expanded product assortment are resonating with customers, and they love the refreshed mobile app. Since the U.S. launch, sales from the mobile app have outpaced other platforms. We are also seeing strong engagement within our historic customer base, and the mix of orders from Welcome Rewards members has increased 500-basis points since the U.S. launch. Partner suppliers continue to add new assortment. We have added nearly 1.3 million new SKUs since early June. The bedding, bath and kitchen categories are leading the improvement in our topline performance in the U.S. We plan to share additional details related to our third quarter 2023 performance on our next earnings call.”

It’s official, Bed Bath & Beyond is back at least online and Overstock, which purchased the intellectual property of the bankrupt retailer, has launched the banner, one that will replace its own.

Already, on the day of the launch, clicking on overstock.com would bring a shopper to bedbathandbeyond.com.

The launch in the United States follows the rollout of the banner on what was the Overstock site in Canada, now bedbathandbeyond.ca.

With the banner’s return, Bed Bath & Beyond will offer the kind of kitchen, bed, and bath-related products customers have embraced since the operation began 30 years ago in addition to a big and growing assortment in furniture and other home product categories that Overstock already had been expanding since its conversion to a home-only operation several months ago.  As such, the online-only Bed Bath & Beyond will place more emphasis not only on furniture but also area rugs, lighting, décor and home improvement. The enhanced offering includes millions of products available at Smart Value, signaling quality for less.

As part of the conversion celebration, customers will see sitewide deals, promotions and perks at bedbathandbeyond.com and the new Bed Bath & Beyond mobile app, including a 25% off welcome coupon for anyone who downloads and shops the new and refreshed Bed Bath & Beyond mobile app, available for iOS and Android. Bed Bath & Beyond loyalty program members will have their points reinstated and get exclusive coupons, as well as free membership to the new Welcome Rewards program, stated as a $19.95 value.

Current members of Overstock’s Club O loyalty program get a 20% off coupon and transfer of membership along with all current rewards members received previously.

“This is a historic day for Bed Bath & Beyond and Overstock and for the broader e-commerce industry,” said Jonathan Johnson, CEO of the new Bed Bath & Beyond, in announcing the banner launch. “Overstock has a great business model with a name that does not reflect its focus on home. Bed Bath & Beyond is a much-loved and well-known consumer brand, which had an outdated business model that needed modernizing. Through this rebranding, we’re breathing new life into Bed Bath & Beyond, positioning it as an asset-light, e-commerce retailer with an expanded home furnishings and furniture assortment. Think of it as Bed Bath & a much bigger, better Beyond.”

Johnson added, “If you liked the Bed Bath & Beyond coupons of the past, you will love our better pricing, special promotions, broader assortment, and the improved customer experience on the website and mobile app. We’ve seen strong customer engagement with our BedBathandBeyond.ca Canada business that launched on June 29.”

Overstock, having already stepped out of other sectors such as jewelry to focus on home and housewares and readying a transition of its banner to Bed Bath & Beyond in early August, was in transitory mode in the second quarter yet still managed to beat Wall Street estimates.

Net loss was $73.5 million, or $1.63 per diluted share, versus net income of $7.1 million, or 12 cents per share, in the year-earlier quarter. Adjusted for one-time events, net loss was $790,000, or two cents per diluted share, versus net income from continuing operations of $8.3 million, or 19 cents per diluted share, in the year-prior quarter, the company noted.

An analyst consensus estimate published by MarketBeat called for loss per adjusted diluted share of nine cents and revenues of $409.6 million.

Overstock reported that net revenue was $422.2 million versus $528.1 million in the quarter a year previous. Operating loss was $4.2 million versus an operating income of $11.5 million in the year-before period.

In a conference call, Overstock CEO Jonathan Johnson (pictured above) said the Bed Bath & Beyond intellectual rights acquisition is an exciting proposition, even as the company gets ready to rebrand under that banner. At a time when almost nothing on its site is overrun or liquidation merchandise, the company was stuck with a legacy name that no longer represented how it goes to market. The Bed Bath & Beyond name will encourage consumers to rethink what they assume about Overstock just as changes to the product assortment establish it as a destination specialty retailer for home and housewares products, Johnson said. The company has added 600,000 new products to its site since early June, all fulfilled on a drop-ship basis in accordance with Overstock’s asset-light business model. It is targeting the most loyal Bed Bath & Beyond customers as the company initiates the rebranding in the United States. In the U.S., the company expects to shift from the Overstock to the Bed Bath & Beyond banner during early August, Johnson said.

In Canada, where Overstock switched from its namesake to the Bed Bath & Beyond banner almost immediately after acquiring the bankrupt company’s intellectual rights, Johnson indicated direct traffic visits to the bedbathandbeyond.ca site have increased substantially. Overstock is applying the vast Canadian customer file it acquired, one order of magnitude larger than Overstock’s previous compendium, including in email marketing campaigns that it rolled out slowly to avoid capture by spam filters. The company has seen an increase in click-through rates, driving further traffic to bedbathandbeyond.ca, he said. The increase in visits has accelerated Overstock’s rate of new customer acquisition, Johnson pointed out, adding bedding, bath and kitchen have been the company’s strongest growth categories.

“The acquisition of the Bed Bath & Beyond brand is the beginning of a new phase of growth for us,” Johnson said. “The successful launch and early performance of our Bed Bath & Beyond business in Canada has been encouraging. The Bed Bath & Beyond brand is strong. In Canada, customers want to buy and are comfortable buying, from the new Bed Bath & Beyond website. We are optimistic about our future with this new brand in the U.S. The combination of a highly recognized and much-loved consumer home brand and our asset-light operating model should meaningfully grow and scale our business in the U.S. and Canada. We know there is work to be done to win Bed Bath & Beyond customers and retain our existing loyal customers through this transition. We have the right strategies, the right action plan, and the right people in key positions to execute this transformation. The entire organization is focused on ensuring the success of the Bed Bath & Beyond U.S. launch, still targeted for early August.”

In commenting on second-quarter results, Johnson added, “The team continued to execute well during the second quarter. As we navigated an intensely competitive environment well with our asset-light business model, we were able to provide smart value to our customers, improve our year-over-year revenue trend, and deliver another quarter of positive adjusted EBITDA. Our balance sheet remains strong with over $300 million in net cash, setting us up well to execute the transformative rebranding of our furniture and home furnishings e-commerce business.

Overstock, fresh from its acquisition of the Bed Bath Bath Beyond intellectual property, plans to rebrand the Overstock.com website under the Bed Bath & Beyond domain name. 

In that event, Overstock and Bed Bath & Beyond customers will have access to online shopping destinations at bedbathandbeyond.ca in Canada and bedbathandbeyond.com in the U.S. On those sites, consumers will be able to shop the range of home furnishings, indoor and outdoor furniture Overstock offers and the kind of kitchen, bedding, and bath products that made Bed Bath & Beyond a major destination for household goods, according to Overstock.

In addition, Overstock is rebranding its Club O loyalty program as Welcome Rewards, which was Bed Bath & Beyond’s equivalent. The newly branded Welcome Rewards program will continue to offer 5% reward dollars on all purchases, as it did in the Bed Bath & Beyond days. which members can redeem in subsequent transactions.

“This acquisition is a significant and transformative step for us,” said Overstock CEO Jonathan Johnson (pictured above). “Bed Bath & Beyond is an iconic consumer brand, well-known in the home retail marketplace. The combination of our winning asset-light business model and the high awareness and loyalty of the Bed Bath & Beyond brand will improve the customer experience and position the company for accelerated market share growth.”

Overstock acquired the Bed Bath & Beyond assets, including website and domain names, trademarks, trade names, patents, customer database, loyalty program data and other brand assets related to the Bed Bath & Beyond banner when the U.S. Bankruptcy Court for the District of New Jersey approved Overstock’s winning bid at a sale hearing on June 27.

The transaction did not include any asset associated with Bed Bath & Beyond’s brick-and-mortar business such as store leases, inventory, warehousing, and logistics infrastructure. The Bed Bath & Beyond-owned buybuy Baby and Harmon banners and their assets were also excluded from the transaction.

Overstock purchased the assets for $21.5 million, funded entirely with cash on hand, it stated. As previously disclosed, Overstock had $374.7 million in cash and cash equivalents at the end of March 31.

As it transitions to a specialty home digital retailer, Overstock is adding products, upgrading its site and aggressively marketing itself so consumers understand its new positioning, CEO Jonathan Johnson told HomePage News.

Although it faces the same challenges most home goods retailers do today, given that consumers who spent heavily in the category during the pandemic have lately shifted a proportion of their spending to other sectors, Johnson is optimistic about the year ahead.

Although the company had carefully prepared its shift to a home-centric format, even shedding strong non-domestic categories such as jewelry, external factors suddenly imposed themselves in ways that made the change more difficult. Specifically, Overstock was exercising the final phase of its pivot to home-only sales just as consumers who had invested heavily in their homes during the pandemic were beginning a spending shift to apparel, restaurants and travel as stay-at-home guidance associated with the COVID-19 pandemic became less urgent. At the same time, inflation intensified and shipping issues produced consumer confusion. As such, the home goods sector found itself coping with a greater-than-expected slowing of sales that began toward the middle of 2022, then more promotional activity than could have been anticipated particularly as major retailers had overpacked inventory early in the year and had to offload stock.

“People weren’t shopping as much on home,” Johnson said. “The timing wasn’t great. That said, our suppliers and vendors who have worked with us for years stuck with us, and, frankly, we were a solution for them because some of their other distribution channels canceled orders in 2022. Our suppliers were looking for channels to sell their products through and Overstock turned out to be a great one.”

Despite the market challenges, Johnson said Overstock believes the home opportunity is a great one as the company prepares to work The Inspired Home Show, March 4-7 in Chicago, to outline its home-focused plan and secure new resources. The first half of this year may remain slow for the home business in general, but stronger prospects could emerge, he said.

“I think 2023 is going to be a tale of two halves,” Johnson said. “The pandemic helped us acquire millions of new customers and, in our transition to home, from the beginning of 2021 to today, we’ve more than doubled the number of home-related SKUs we offer on our site.”

Even as it shifted strategic focus, Overstock had to advance backroom development to elevate the consumer experience on the site as it became more home oriented.

“When we take the non-home products off the site there’s de-linking so we’re not sending search terms to Google and Google’s not finding things in their natural search we don’t have,” Johnson said. “We’re currently in the process of overhauling our internal search structure and taxonomy to reflect our focus on furniture and home furnishings. That search process will make it, when it’s done, easier for customers to find exactly what they are looking for. Some of this we anticipated, in some places it’s been more difficult, but overall, front room, back room, this change in focus will be 100%. Making dream homes come true for our customers has been the right thing for us.”

On site design, Johnson said, it has become cleaner with a more artistic flavor to the look. Then, he pointed out that it’s easier to find curated rooms now than before the changeover, which is a point of emphasis.

“One of the things we did was partnered with six home-focused brand ambassadors who are expert in renovation and home decor and designing,” he said. “They put rooms together so there is more of a curated look and feel. There’s also been an emphasis particularly in the fourth quarter on giftable products. As we took jewelry and watches and apparel off the site, those tended to be good products in the fourth quarter. Fourth quarter is no longer our biggest quarter, but we did well by adding small appliances and home essentials like pots and pans and knives and small appliances, things like coffee makers, mixers, blenders, vacuums, things that are more giftable than a dining room table is. Those categories particularly in the branded like Mr. Coffee, Oxo, KitchenAid, Dyson, those had more prominence on the site in the fourth quarter.”

The changes in product mix and site look and function has helped consumers see Overstock in a new light, Johnson noted.

“As shoppers come to our site, they’re viewing us more as a premier destination with new, on-trend home goods,” he said. “We have to elevate that shopping experience for them by providing inspirational and helpful design solutions. They know they can get a great deal. Now they know they can come here and find the look they’re looking for and the help they’re looking for. We’re consistently refining the shopping experience to best match the customers’ home desires.”

Johnson said Overstock, as part of its business reconfiguration, is emphasizing national brands where such brands can make a difference.

“I think it’s really important as we rebrand into home. People recognize us as a destination, and it’s also important that they associate the Overstock name with on-trend home goods, not liquidation. We’re not a liquidator. That’s a two-decade-old thing. We moved from being a liquidator two decades ago to being a general merchandiser and now being a home-focused online retailer. So having brand names is really important.”

National brands not only give consumers a better sense of what Overstock is about today, but they also have a halo effect, he said. In those furnishings categories where labels aren’t as prominent, the national brands carried, especially in housewares, assure consumers that what is being offered across the site is of solid quality.

The changes by Overstock haven’t been accomplished easily.

“Getting rid of all of our non-home products was, on some level, a difficult decision,” Johnson said. “When we made the decision, non-home was 20% of our revenue. Not many businesses say, let’s turn off 20% of our revenue. We decided to do it in a measured, slow way, first turning off the easier products then turning off the more difficult products like jewelry and watches. I think the hardest thing about that really was some of those suppliers, some of those partners had been with us for decades. They were personal friends of mine and many of the people that they worked with at Overstock over the years. Saying goodbye to their business was hard, but it was the right thing for our business to grow in the future. And that’s paid off because we had home product suppliers that wouldn’t do business with us in the past because they didn’t want their products next to non-home products, come to us and say, now it’s the time to do business with Overstock.”

New Outreach

Even as it made other moves in completing its shift to home-centric operations, Overstock acted on how larger developments could affect its business moving forward. In a key insight, Overstock recognized early on that consumers were shopping more for home products and even furniture through their mobile devices, Johnson said. So, the company promoted its mobile app to better accommodate customers who wanted to shop on a smartphone or tablet. The move paid off, he said, noting the Overstock version was the most downloaded furniture app on Android and iOS last year.

“That has been particularly useful for us,” he said, as mobile “has become our fastest-growing sales channel.”

Customer engagement remains a critical issue, and Overstock has taken steps to make its operations more attractive to consumers.

“In late 2020, we began offering free shipping on everything for our continental U.S. customers,” Johnson said. “It’s clear that’s been a win-win with our customers, particularly with bulky items, which is furniture. We’re committed to continuing to add benefits like that. Search experience, the curated rooms, the move to giftables, expanding the SKU count in good, better, best so our savvy shopper can find the best deal for the price point she’s willing to pay. All these things I think have been helping customers achieve their home goals.”

The company’s loyalty program is still attracting customers, Johnson said, which is a benefit both to them and to Overstock.

“Our Club O membership program continues to be very popular,” he said. “Customers that are Club O members shop on the site more frequently, convert at a higher rate, have a higher average order side, and we will be rolling out a more robust credit card offering.”

Just launched in early February, the new Overstock Mastercard offers complimentary Club O membership, saving holders the $19.95 annual charge and giving them a range of purchasing rewards. Club O membership includes access to extra rewards, free returns, a price match guarantee and double rewards for reviews. The card, launched with Citi Retail Services, has no annual fee attached and comes with special financing for up to 60 months on designated purchases.

Early on, Overstock was an aggressive marketer with memorable advertising. Now, the company is again extending consumer outreach, Johnson said.

“We’ve launched a brand campaign across multiple channels,” he said. “That started in October of last year, highlighting our 100% home focus. The ad is entitled, ‘Come On, Get Comfy.’ ”

The tune is familiar to many from the Partridge Family song “Come On, Get Happy.”

“It’s kind of an earworm,” he noted. “It’s hard to stop humming. But it reinforces the intersection of home products, design expertise, smart value, communication. We’re a home company. While less and less people watch TV or ads on TV, the reception we’ve seen has been good, particularly the YouTube ads and things we’ve done on social media. That’s been very helpful. Then both our brand ambassadors and influencer campaigns have helped people understand how we’re re-engaging and re-engaging with this newly positioned home business. So it’s pretty exciting stuff.”

New realities have provided new marketing challenges and opportunities, Johnson said, but the ability to go beyond television commercials has helped it target consumers more effectively.

“Two decades ago, when we launched big on TV, you discovered the secret of the O,” he said. “That was really putting us on the map. The world has changed since then and performance marketing has gotten better. The ability to measure return on ad spend is so good, and people watch less cable TV. There’s streaming. Ads are easier to avoid. So we balanced the two. But I don’t think, as we refocus our brand on home, you’ll see our splash as big on TV the way we did a long time ago. Our presence will be more than it has been in recent years. TV is the hardest thing to measure your return on ad spend. You do it a little bit on faith. Ad agencies will give you numbers, but the numbers are surely a lot cloudier than they are when you’re doing paid keyword or PLA with Google.”

In part, the change in media and generations means Overstock has had to take a broader approach to outreach than it did in the days when it was a major TV advertiser. Especially with new generations emerging as apartment dwellers and homeowners, the outreach has to be diverse and include building the consumer relationship. It is there that the Overstock app and a significant social media marketing program can promote additional sales.

Johnson noted that the new in-app features and the evolving platform have been part of making Overstock more engaging. Yet, working through social media platforms, whether those of Facebook, Instagram or TikTok, is where Overstock can become even more interactive in ways that younger consumers can appreciate.

“There is always something new,” Johnson says. “We’ve adapted by creating content that encourages interaction with shoppers, things like quizzes that focus on style. If you look at what our brand ambassadors are doing, the really quick videos: Are you gold or silver? Are you leather or velour? You ask a lot of these questions.”

Besides helping consumers figure out their home decor preferences, Overstock’s brand ambassadors become curators. Shoppers can align with their ambassador or ambassadors of choice. Ambassador activities on the site, such as curating rooms to make it easier to shop a look or providing advice consumers can take with them as they check out the broader assortment, support the overall goal that Overstock has set for itself: helping consumers build their dream homes. So, Overstock is using the input from its ambassadors as tools for the customers to use in shopping. The company even goes a step beyond ambassadors and influencers and draws from outside sources including customer content to provide more perspectives on shopping the available assortment.

“People can watch quickly and see what the ambassadors they like are doing,” Johnson said. “We share user-generated content shoppers or what influencers send us, and that enables beautiful images across lots of social platforms. We can’t just use traditional methods. We can’t also rely on people who were loyal shoppers a decade or two decades ago. It’s the new homeowner, it’s the person who moves into their new apartment. We want them to think Overstock, and think of us as smart value and an easy place to shop and find their product and return their product. As people build their dream homes, we want them to think we’re the place where that comes true.”

It doesn’t end there because the constant flux in media today can generate rapid change. So, Overstock considers its app as an important vehicle that it can use to help it manage communication with the consumer on an ongoing basis.

“As far as interactivity with customers, the app is great,” Johnson says. “We’re able to push things to them. As I noted, it’s the most downloaded furniture app on iOS and Android last year. Our customers love the app because it has features that make buying decisions easier. We’ve dipped our toe in the water with AR and 3D functionality that lets people understand what the items will look like in their space. We did a beta test last year and paused that as we work on it.”

Overstock has a range of initiatives in development to enhance interaction with the customer through technology.

“Our brand ambassadors and influencers engage with our customers in lots of ways on shoppable content that is really inspirational, videos saying what they love designing rooms on our site. Here’s Luke Caldwell’s room. You can click on products in the room, see them right away, put them in your shopping card and buy,” Johnson said.

Present Challenges

As 2022 ended, the holiday season was something of a slog for Overstock and other home goods retailers, Johnson said. But Overstock saw categories where it generated substantial growth.

“Purchases of giftable items such as small appliances increased significantly,’ he said. “We really put a focus on that. We saw an opportunity where other retailers were struggling, to pick up the slack, to go to their suppliers and make them our suppliers. So we anticipated that customers would want those products during the holidays, and we were able to supply them.”

Overstock is looking forward to the year ahead, Johnson said, as the company pushes to expand its customer base through new channels and boost marketing efforts. Then, in the second and third quarters, Overstock will turn its attention to outdoor living and associated products. He says the new credit card will help the company with retention and loyalty as it makes advancements in personalization.

“I’m excited for 2023,” Johnson said, “particularly for the back half of 2023 when I think when the industry gets through what still is a glut in supply.”

The experience of transforming to a dedicated home format has led to new discoveries and ideas at Overstock, Johnson said.

“We’ve learned that our asset-light business model positions us really favorably versus our peers in the industry,” he said. “It did so during the pandemic when the supply chain broke, and it was hard for everyone to get inventory. Our vast partner network meant we had better inventory during the post-pandemic highly promotional period because we don’t own inventory that is expansive. We could work with our suppliers to bring the price down and remain promotional without hurting our gross margin. We’ve learned throughout the pandemic and the last quarter how important the asset-light model is. We’ve also learned how important it is to have a strong balance sheet.”

A number of competitors have confronted financial turmoil but Overstock remains solid, Johnson said.

“Our balance sheet is robust,” he said. “It allows us to pay our suppliers quickly, which means they’re more eager to do business with us particularly in tough times. And we’ve learned that online shopping in the furniture space, which surged during the pandemic, is here to stay. It may have ebbed just a little bit, but when you look at it compared to what it was pre-pandemic, it’s still so strong.”

Johnson said he’s optimistic about the position Overstock has set for itself in the market.

“We like who we are. We like where we are. We like who we market to. We think our business is in a really good place,” he said.

He added, “Over the years, Overstock has succeeded when we focused. When we focus on who our customer is. We know that today. When we focus on what we’re selling. We’re more focused there than ever. And when we focus on what we call our financial recipe card: sustainable, profitable market share growth. We were profitable in the recession: 2009, 2010 and beyond. We’ve remained profitable unlike our peers. I think those areas of focus set us up for success.”

Today, Overstock wants to keep its attention firmly fixed.

“We think focus is the right thing,” Johnson said. “I think we’re in a recession that’s going to last a while, and not all of our competitors are going to get through it. Or they’ll get through it and come out damaged. With our strong balance sheet and focus on our P&L, we think we’re going to come out with sustainable, profitable market share growth stronger than ever.”

With a change in focus to a home-only assortment and headwinds from consumer behavior changes and general economic conditions, Overstock suffered a loss for the fourth quarter, but the online retailer managed an adjusted net income gain for the full fiscal year despite lower revenues.

Overstock posted a company net loss from continuing operations of $15.5 million, or 34 cents per diluted share, versus net income of $32.9 million, or 68 cents per diluted share, in the year-earlier period.

Adjusted for one-time events, net loss was $1.95 billion, or four cents per diluted share, the company noted. Adjusted net income was $15.6 million, or 36 cents per diluted share, in the year-prior period.

A MarketBeat-published analyst consensus estimate called for an adjusted diluted net income of three cents per share and revenues of $448.7 million

Net revenue was $404.9 million versus $612.7 million in the year-previous quarter. Operating loss was $2.6 million versus operating income of $19.1 million in the year-before period.

For the full fiscal year, the company recorded a net loss from continuing operations of $35.2 million, or 83 cents per diluted share, versus net income from continuing operations of $389.4 million, or $3.57 per diluted share, in the annum earlier. Adjusted earnings per share were $22.9 million, or 52 cents per share, the company pointed out. Adjusted net income was $94.7 million, or $2.19 per diluted share, in the year prior.

Net revenue was $1.93 billion versus $2.76 billion in the year previous. Operating income was $27 million versus $111.1 million in the year before.

“The team maintained strong operational discipline and delivered another quarter and year of positive adjusted EBITDA while navigating shifting consumer demand and a highly promotional competitive environment,” said Overstock CEO Jonathan Johnson, in announcing the financial results. “Revenue declined 30% for the year, driven by the weak macroeconomic backdrop that impacted consumer sentiment and our strategic actions to become a prominent home-only online retailer. 2022 was a transformative year for Overstock. We completed the removal of all non-home merchandise from our site to better align our well-recognized brand name with home, and we increased our assortment of home-related products by over 50%. We now have over twice as many home-related products than we did when we began our non-home exit project two years ago. We increased mobile app penetration as it has become our strongest customer engagement platform. We embarked on a refreshed branding campaign which we expect to accrue benefits for years to come. We proved our ability to drive sales during high consumer demand periods throughout the year, including the Cyber 5 sales period. And we made operational improvements in our Canada business. We simplified our equity capital structure, returned $80 million through share buybacks, and invested $15M in tZERO to drive additional long-term value for our shareholders.”

Looking forward, Johnson said, “2023 will mark our first year as a 100% online home retailer, since going public over 20 years ago. We know we must focus our efforts on improving topline performance. While the economic environment remains uncertain, our asset-light business model and strong balance sheet position us well for success, both in the short- and long-term.”