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California Gov. Newsom Criticizes Bed Bath and Beyond’s Exit Strategy
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In a surprising turn of events, California Governor Gavin Newsom has publicly criticized Bed Bath and Beyond’s exit strategy after the retail giant announced plans to halt opening stores in the state. The decision has sparked debates on business regulations, economic impacts, and the future of brick-and-mortar retail in California.
Why is this happening, and what does it mean for Californians and investors alike?
Bed Bath and Beyond’s Exit Strategy Explained
Bed Bath and Beyond’s recent announcement detailed that the company will not pursue new store openings in California, citing “overregulation, high costs, and operational risks” as primary reasons. The executive team emphasized a focus on markets that provide more favorable conditions for growth and profitability.
This statement has raised questions among stakeholders: Are the challenges purely financial, or do regulatory hurdles play a larger role?
According to industry experts, California’s stringent labor laws, high commercial real estate costs, and complex tax structures make it one of the most expensive states for retail expansion. Many companies, especially those undergoing restructuring, consider these factors before committing to long-term investments.
Marcus Lemonis’s Statement on California Operations
In a recent press release, Marcus Lemonis, Executive Chairman of Bed Bath & Beyond, articulated the company’s decision to refrain from opening retail stores in California. He emphasized that the move was based on practical business considerations rather than political motivations.
Lemonis criticized the state’s regulatory environment, labeling it as “overregulated, expensive, and risky,” which he believes hampers business operations and growth.
“This decision isn’t about politics, it’s about reality. California has created one of the most overregulated, expensive, and risky environments for businesses in America,”.
Lemonis highlighted several factors contributing to this challenging environment, including high taxes, fees, and wages, alongside what he described as “endless regulations that strangle growth.” He argued that such conditions make it increasingly difficult for businesses to employ people, maintain operations, and deliver value to customers.
Despite this, Lemonis reassured California customers that they would continue to have access to Bed Bath & Beyond products through the company’s online platform, BedBathandBeyond.com, offering 24–48-hour delivery, and in many cases, same-day service.
This statement underscores the company’s commitment to adapting its business model to align with environments that support sustainable growth and operational efficiency.
Governor Newsom’s Response
Gov. Newsom expressed disappointment, emphasizing that Bed Bath and Beyond’s exit signals a missed opportunity for California workers and consumers. “We want businesses to grow here, but companies must recognize the value of California’s workforce and consumer base,” he said in a press statement.
The governor also stressed the need for collaboration between businesses and state officials, highlighting incentives and support programs available to help companies thrive without leaving the state.
Why is the governor taking a strong stance? Analysts suggest that large-scale retail exits impact jobs, local economies, and public perception, making it essential for state leaders to intervene or voice concerns.
Local Reactions and Economic Implications
City officials and local business leaders have also reacted. San Jose Mayor Sam Liccardo commented that while the decision is unfortunate, other local businesses and startups could fill the gap, potentially offering new job opportunities.
However, many residents expressed frustration on social media, worrying about limited retail options and potential price increases.
A recent tweet noted, “Bed Bath and Beyond shutting down in California is a big loss for shoppers and employees alike, hope they reconsider.”
The economic implications extend beyond retail. Analysts point out that large retailers contribute significantly to tax revenues, supply chain operations, and ancillary businesses. Bed Bath and Beyond’s exit could affect suppliers, warehouse operations, and logistics partners in California.
Insights from Retail Executives
Marcus Lemonis, Executive Chairman of Bed Bath and Beyond, defended the company’s approach, stating that focusing on markets with lower operational risks is crucial for sustainable growth. He emphasized that the decision was strategic, aiming to protect shareholder value and streamline operations.
Industry commentators note that this move aligns with broader trends in retail, where companies reassess physical store portfolios in favor of e-commerce and high-performing regions.
Public Reaction and Social Media Buzz
Social media has amplified reactions to the announcement. Users highlighted the challenges of operating in California, while others criticized the company for leaving employees and customers behind.
A viral post stated, “It’s a shame Bed Bath and Beyond is leaving California, but the costs and regulations are real issues”
Another popular tweet added, “Bed Bath and Beyond’s exit is a lesson for other companies thinking of expanding in high-cost states.”
These discussions underline the tension between corporate strategy and community expectations, highlighting the need for transparent communication and long-term planning.
What This Means for the Future of Retail in California
The Bed Bath and Beyond’s situation illustrates broader challenges for brick-and-mortar retail in high-cost states. Retailers are balancing between profitability, regulatory compliance, and consumer demand.
Experts suggest that businesses considering California should leverage incentives, evaluate regional market potential, and plan for labor and tax costs carefully. For consumers, this could mean changes in retail availability and a shift towards online purchasing.
Conclusion
Bed Bath and Beyond’s exit strategy has sparked widespread debate over corporate responsibility, state regulations, and economic impact. While the decision may be strategic for the company’s growth and stability, it highlights critical challenges faced by retailers in California.
Gov. Newsom’s critique emphasizes the importance of collaboration between businesses and state officials, while public reactions show concern for jobs and consumer options. Ultimately, this case may serve as a benchmark for how other retailers approach high-cost, heavily regulated states in the future.
As Bed Bath and Beyond’s reshaping strategy unfolds, investors, employees, and consumers will be closely watching for updates on store closures, online operations, and potential re-entry into the California market.
FAQ’S
Is Bed Bath and Beyond closing in California?
Yes, Bed Bath and Beyond will not open new stores in California due to high costs, regulations, and operational challenges.
What is happening with Bed Bath and Beyond?
The company is restructuring, closing some stores, and shifting focus to online sales to manage financial and operational challenges.
Who is the CEO of Bed Bath and Beyond?
As of 2025, the CEO is Gina Bianchini, with Marcus Lemonis serving as Executive Chairman overseeing strategic decisions.
Why did Overstock buy Bed Bath and Beyond?
Overstock acquired parts of Bed Bath and Beyond to expand its e-commerce presence and leverage the brand’s customer base online.
Is Bed Bath and Beyond still open in the USA?
Yes, some stores remain open, but many locations have closed as the company focuses on online operations.
Is Bed Bath and Beyond closing all stores in the USA?
No, not all stores are closing, but a significant number have been shut or restructured to prioritize digital sales.