Bed Bath & Beyond CEO unveils revamped nearly 100,000-square-foot NYC flagship store

Given Mark Tritton's extensive retail resume — consisting of opening fancy flagship stores for luxury retailer Nordstrom to bringing cheap chic back to Target's home department — it's not a shock the Bed Bath & Beyond CEO knew things had to seriously change inside the company's most recognizable location of all positioned on 620 Sixth Avenue in New York City.

When Tritton walked into the ginormous 92,000-square-foot store in December 2019 soon after he took over as CEO, he knew that changes needed to be made. The sky-high racks of on-sale merchandise cluttered up the store, making it impossible for people to confidently shop. There was too much merchandise in the store, too.

Consumers complained at will online about the maze of a store. All in all a terrible shopping experience for such a key store that had barely been remodeled in 30 years as prior management clung to an outdated view on retailing.

"I think that the store we inherited here was incredible. It was large, but it was a pretty daunting experience, if I can call it that. It was more like a warehouse," Tritton tells Yahoo Finance during a sneak peek inside the store ahead of its reopening on July 22. "Everyone remembers it. It was dark, it was jam packed with merchandise. It was kind of a bit of a bazaar, and that was fun, but it really wasn't standing for the brand that we wanted to create. So we were really thinking about how to modernize the experience."

Tritton's course of action to create that modernization? Close the whole store down in December 2020 for a full-scale remodel that better reflects where Tritton wanted to take the brand.

When consumers return on July 22, they will find a completely different place to shop.

Gone are the sky-high racks of merchandise, replaced by lower fixtures that allow you to see from one side of the store to the other. The store is way better lit, which will go a long way to highlighting Bed Bath's new higher margin private-label merchandise. The merchandise assortment has been edited down to focus on destination categories for the brand like bathroom, home decor and home organization.

For added wow factor (a trademark of Tritton's), there is a cafe inside the store, a Sodastream shop (now owned by PepsiCo), a Casper bedding shop (per a new deal with the bedding maker) and a scan-and-go checkout option. The front of the store has been reconfigured so that consumers could quickly come in and pick up online orders or return merchandise.

Tritton says the store is laid out to be profitable. To get there, however, consumers have to return to a New York City still dealing with the effects of the COVID-19 pandemic. Tritton remains a big believer in New York.

"We never doubted it, we really didn't. I think that it's not a vanity project. It's not about, we have to have this flagship to kind of put a stake in the ground like a castle and like a lot of retailers used to do. We have a thriving business here in New York," Tritton explained.

The store is one part of Tritton's turnaround plan for the company, which he says continues to be in its early days. Bed Bath & Beyond plans to invest $1 billion to $1.5 billion in the business over the next three years. During that stretch, Tritton will earmark $250 million to remodel some 60% of Bed Bath & Beyond stores (about 450 stores). Many of the remodels will get touches from the revitalized New York City store.

The rest of the funds will be split between improvements to e-commerce technology and the supply chain. Money is also being spent on launching 10 new private-label brands (seven have already debuted).

Bed Bath & Beyond is targeting low- to mid-single digit same-store sales growth by 2023 and $1 billion in operating profits.

To be sure, the company's latest earnings report showed Tritton and his team are heading down the right path.

The company's first quarter same-store sales in the key categories of bedding, bath, food preparation, home decor and home organization rose 7% from the first quarter of 2019 (aka pre-pandemic numbers). Meanwhile, Bed Bath's gross profit margins rose 820 basis points year-over-year on an adjusted basis as the company sold more private-label merchandise.

And lastly, the company struck an upbeat tone with its full-year outlook. Tritton raised his outlook for adjusted operating profits to $520 million to $540 million from $500 million previously. The company forecasts adjusted EPS for the full year above consensus, too.

"We're doing a lot, I won't doubt it. We've really put a lot on the agenda. There's a lot of sweat going in there," Tritton concedes, adding that he is confident in the company hitting its longer term financial goals.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.